Wunderlich: Chesapeake Energy Will Keep Its Powder Dry For Better Days

In a report published Wednesday, Wunderlich Securities analyst Jason A. Wangler reiterated a Buy rating and $24.00 price target on Chesapeake Energy Corporation CHK.

In the report, Wunderlich Securities noted, "Buy-rated Chesapeake Energy (CHK) announced it is reducing its CapEx budget for 2015 in response to low commodity prices in order to reduce the cash burn it seems so many had been focused on in the past month."

Wangler added: "Even with another round of cuts the company still does see slight production growth as Chesapeake continues to move its strong property base forward."

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He said his team wasn't overly concerned about spending, "but any time a company reduces spending and still shows growth," he added, "we feel it shows the strength of the asset base."

In the era of low oil prices, the analyst said he is a fan of the company's decision to cut spending, particularly because it has other "accretive options for its ample cash and cash flow."

Chesapeake Energy Corporation closed on Tuesday at $14.26.