In a report published Monday, Canaccord Genuity reiterated its Hold rating on Southwestern Energy Company SWN, and slightly raised its price target from $37.00 to $38.00.
Canaccord Genuity noted, “We increased our target price $1 to $38 per share following minor model refinements. Our target price is anchored on a $5 long-term NYMEX gas price, which is only modestly higher than the gas price currently reflected in E&P equities. In '13, assuming a ~$2 billion capital plan, we expect Southwestern to generate ~12% production growth (633.3 Bcfe), predominately from the Marcellus. Our '13 outlook is fractionally below the midpoint of company guidance (628-640 Bcfe). Our basin-by-basin analysis indicates the Fayetteville Shale is economically inferior to other major gas shale plays. The Marcellus improves the company's economic profile though is subject to infrastructure limitations. In terms of new ventures, two recent promising geo-pressured Brown Dense horizontal tests suggest this emerging oil/gas play is marginally economic.”
Southwestern Energy Company closed on Friday at $33.35.
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