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Why Is Imperial Capital Lowering Its 1-Year Target At Cabot Oil & Gas?

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In a report published Wednesday, Imperial Capital analyst Bob Christensen maintained an Outperform rating on Cabot Oil & Gas Corporation (NYSE: COG), while reducing the price target from $36 to $35.

In the report, Imperial Capital noted, "Cabot Oil & Gas Corp (COG) generated revenue of $2.2bn, EBITDAX of $1.5bn, and adjusted EPS of $0.97 during the latest 12 months (LTM) ended 12/31/14, we estimate COG had $21mn in cash and cash equivalents, and approximately $1.8bn in total debt."

"Our price target is about 23% above the recent share price. We remain positive on COG even in a low 2015 commodity price environment of sub-$55/bbl oil (WTI) and sub-$3.00/Mcf natural gas (NYMEX)." Christensen commented.

The analyst said that the company had "announced plans to slow drilling and/or shut in some of its natural gas production because of potentially low prices," while adding, "We believe this announcement underscores the company's high capital efficiency and nimbleness. In our view, COG has now set up a situation where it prospers to a greater extent later, 2016 and 2017, when natural gas prices are likely to be stronger as North American supply-demand dynamics turn ever more favorable and when much needed new natural gas pipeline capacity arrives to relieve the over-supplied Appalachian region where COG operates."

Latest Ratings for COG

May 2018Morgan StanleyMaintainsOverweightOverweight
Apr 2018Morgan StanleyMaintainsOverweightOverweight
Apr 2018Morgan StanleyMaintainsOverweightOverweight

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