Imperial Capital on Thursday lowered Bonanza Creek Energy Inc's (NYSE: BCEI) one-year price target to $30, from $33, based on the lower commodity pricing environment.
Analysts from Imperial Capital wrote, “Despite the increase in BCEI's P1 reserves and the addition of 671 net drilling locations, we have lowered our RNAV per share after incorporating lower commodity pricing in our unit valuation. Since our price target is based on the RNAV, we have decreased our price target to $30 to reflect this change.”
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Due to the fall in oil prices, Bonanza Creek Energy has lowered 2015 capital expenditure expectations by 29 percent. The energy company has one of the lowest liquidity ratios of its peers at 2.9x and analysts note that its capital expenditure requirements do not jeopardize the firm's debt obligations. Imperial Capital expects that when commodity prices improve, it will lead to an increase in capex and drilling activity.
Imperial Capital maintained an Outperform rating on Bonanza Creek.
Shares traded recently at $22.69, up 3.6 percent.
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