UPDATE: Canaccord Genuity Initiates Coverage on Clayton Williams Energy with Hold Rating, $44 PT on Attractive Risk/Reward

In a report published Friday, Canaccord Genuity analyst Ipsit Mohanty initiated coverage on Clayton WillIams Energy CWEI with a Hold rating and $44.00 price target. In the report, Mohanty noted, “With core assets in two of the most prolific shale plays in Lower 48 – Permian and Eagle Ford – and a multi-decade drilling inventory, we believe Clayton Williams Energy (CWEI) offers an attractive risk/reward story. But a stressed balance sheet has curbed activity in the near term. With the announcement of the sale of Wolfberry assets, we believe CWEI's plan to reduce debt and accelerate NAV through partnerships is in effect. Having said that, the only predictable matured asset is now sold and now CWEI will derisk the complex Delaware Basin and test its Eagle Ford acreage. A JV of the S Delaware Basin will be crucial in realizing the full potential of the asset but we remain cautious on the timing and nature of the transaction. Meantime, near-term production lacks growth. We initiate CWEI with a HOLD rating. Our price target of $44 offers 13% upside potential over the current price.” Clayton Williams Energy closed on Thursday at $39.06.