UPDATE: Bank of America Lowers Chesapeake Energy's PO

According to a research report published this morning, Bank of America has lowered Chesapeake Energy's CHK PO from $38 to $31. In the report, Bank of America said, "We think to describe CHK as high risk at this juncture is unhelpful for investors; however, it is equally unhelpful to portend any change in our view of the fundamental underlying value. More helpful perhaps is to reassess a stressed valuation case that acknowledges an inflated risk premium. Our unadjusted valuation is $38 per share; inflating the cost of capital by the equivalent expansion in CHK's bonds reduces that value to ~$31. We lower our 2012E EPS from $2.01 to $0.75. However when the dust settles we fully believe successful execution of CHK's transition from gas to liquids positions the shares could be one of the most opportunistic value plays of the large cap US oils in 2012." Bank of America maintains its Buy rating on Chesapeake Energy, which closed yesterday at $16.74.