UPDATE: Stifel Downgrades Chesapeake Energy Corporation to Hold, Removes PT on Fair Valuation

In a report published Friday, Stifel analyst Amir Arif downgraded the rating on

from Buy to Hold, and removed the $26.00 price target. In the report, Stifel noted, “We are downgrading CHK from a Buy to a Hold on fair valuation, expectations for no production growth heading into 2014, and a view that ongoing efficiency improvements and additional potential noncore asset sales will not add enough meaningful upside potential to the stock to offset EBITDA multiple and production growth concerns. We believe that investors will begin to shift their investment focus from P/NAV discounts to EBITDA multiples and growth outlook for CHK and as that shift happens, this name looks fairly valued on an absolute basis and will relatively underperform its peers. At the start of the year, as the company faced large funding gaps and a levered balance sheet, the stock was trading at distressed levels on a P/NAV basis and our thesis was that as this funding gap was addressed through large asset sales, this discount would narrow. With the P/NAV having moved from below 50% to 78% today, and with the company talking about living within CF next year, we believe the focus will shift more towards EBITDA multiples and growth; metrics on which CHK does not look as attractive.” Chesapeake Energy Corporation closed on Thursday at $26.41.