Jefferies lowers its rating on Ultra Petroleum UPL to Hold from Buy and cuts its price target on shares by $5 to $22 on weak gas fundamental and bleak production outlook.
Jefferies notes, "Rising Marcellus service costs continue to pinch IRRs while Pinedale returns appear marginal below $5. Absent a gas price bounce or a southern DJ Basin discovery, UPL should struggle to post debt adjusted production per share growth."
UPL closed at $25.24 on Thursday.
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