Market Overview

UPDATE: Morgan Stanley Initiates Coverage On Energen On Balanced Risk-Reward

Share:

In a report published Thursday, Morgan Stanley analyst Drew Venker initiated coverage on Energen Corporation (NYSE: EGN) with an Equal-Weight rating and $66.00 price target.

In the report, Morgan Stanley noted, "Relatively balanced risk-reward under status quo; upside potential with enhanced inventory and cost reductions. Energen is investible through the cycle and would survive through a sustained downturn, in our view. On an absolute basis we see positive risk-reward (1.8:1 upside to downside); however, this skew is comparable to peers. The company has a superior balance sheet which is offset by shallower high rate of return drilling inventory which drives an in line multiple relative to its Permian peers.

"We would be more positive and see incremental upside potential (to our bull case) through: 1) reductions in well costs and LOE (operating costs), 2) expansion of high quality drilling inventory (through exploration/delineation drilling or organic leasing),and 3) successful testing of additional zones in the Midland Basin or confirmation of higher density drilling. All three of these are plausible, but we would like to see progress on these fronts before using them as the basis for valuation."

Energen closed on Wednesday at $64.64.

Latest Ratings for EGN

DateFirmActionFromTo
Nov 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight
Oct 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight
Sep 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight

View More Analyst Ratings for EGN
View the Latest Analyst Ratings

 

Related Articles (EGN)

View Comments and Join the Discussion!

Posted-In: Drew Venker Morgan StanleyAnalyst Color Initiation Analyst Ratings

Latest Ratings

StockFirmActionPT
FLRVertical ResearchUpgrades
SLGMorgan StanleyMaintains58.3
FASTMorgan StanleyMaintains49.0
EGHTMorgan StanleyMaintains35.0
CARMorgan StanleyMaintains44.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com