In a report published Thursday, Credit Suisse analyst Edward Westlake reiterated a Neutral rating on Hess Corporation HES, but lowered the price target from $72.00 to $70.00.
In the report, Credit Suisse noted, “HES delivered strong operational results in the Bakken, Utica and offshore. Yet the shares sold off more than peers. HES is the first large cap E&P to report. Investors decided $2.5-3bn of cashflow in 2015 and $4.7bn of capex do not make easy bedfellows even with a decent balance sheet and potential MLP. Investors who use the strip have concerns that HES could be a canary in the coal mine for investor tolerance of outspend and negative earnings. HES management were very clear about being in a pre-tax loss position at current oil prices (not a surprise). We believe the strip looks too low; but that HES shares are fairly valued for our $75/bbl WTI midcycle. We revise EPS and lower our TP to $70/sh (from $70).”
Hess closed on Wednesday at $66.02.
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