UPDATE: Imperial Capital Downgrades Carrizo Oil & Gas and Lowers PT

According to a report published earlier today, Imperial Capital downgrades Carrizo Oil & Gas CRZO from Outperform to In-Line and lowers one-year price target from $35 to $30. Imperial Capital commented on reasons supporting the downgrade: "(1) The estimated corporate asset value post FY12 asset sales is $877mn versus $1.5bn (YE-11), which implies a $17/share NAV versus $26/share currently. (2) The company has highly prospective options on the Eagle Ford/Utica/Niobrara rich gas oil reservoirs with expected FY12 EBITDA growth of 83% (prior to asset sales) to trade at 6.8x FY12 EV/CF versus 11.4x 2006-2011, but with all sales completed, we believe EBITDA growth could be almost half of expectations at 40% growth and the trading multiple is 7.7x FY12 EV/CF. (3) We don't believe natural gas pricing is a key driver for the stock given production by volume of the commodity is estimated to go to 62% 4Q12E from 84% at 4Q11A (70% with divestitures and 50% currently hedged). We estimate $17mn EBITDA downside at $2.50/Mcf versus $3.30/Mcf (5% decrease from FY12 estimates)." Shares of Carrizo were trading at 27.60 before the market opened today.