UPDATE: Wunderlich Securities Downgrades Legacy Reserves as Challenging Permian Market Makes 2014 Outlook Uninspiring
In a report published Thursday, Wunderlich Securities analyst Abhishek Sinha downgraded the rating on Legacy Reserves (NASDAQ: LGCY) from Buy to Hold, and lowered the price target from $31.00 to $26.00.
In the report, Wunderlich Securities noted, “We are downgrading Legacy Reserves (LGCY) to a Hold and reducing our price target to $26 from $31. In our view, risks to Legacy's valuation are skewed downward amid a flat production growth in the absence of acquisitions, widening differentials, and rising costs. High commodity prices and a competitive M&A market could make the year more challenging for Legacy as it continues to look for 3rd party acquisitions in order to grow. Based on our valuation, the company appears to offer lower total return prospects versus its peers. Accordingly, we are downgrading the stock to a Hold rating.”
Legacy Reserves closed on Wednesday at $27.41.
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