Bank of America Downgrades Chesapeake Energy, Valuation Played Out

In a report published Tuesday, Bank of America analyst Doug Leggate downgraded Chesapeake Energy

from BUY to NEUTRAL, lowering their price target from $36 to $31. The report noted, "After keeping our Buy on Chesapeake through the turmoil of the last year, we are lowering our rating on the shares to Neutral and trimming our PO to $31 from $36. At the root of this change is that the recovery thesis which initially attracted us to CHK's distressed valuation has largely played out. While we expect CHK to accelerate efforts to improve efficiency across the board, including steps to increase free cash flow, much of this has arguably been recognized in a share price that appreciated 63% in the past year." CHK closed Monday at $26.20 and is currently trading at $26.36.