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Sterne Agee CRT Upgrades Chesapeake Energy (CHK) to Buy; Bear Thesis Crowded

June 29, 2015 6:41 AM EDT
Get Alerts CHK Hot Sheet
Price: $83.48 +0.01%

Rating Summary:
    18 Buy, 16 Hold, 10 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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Sterne Agee CRT upgraded Chesapeake Energy (NYSE: CHK) from Underperform to Buy with a price target of $13.00 (from $9.00), saying the bear thesis is crowded and issues are not fatal.

Analyst Tim Rezvan commented, "We believe CHK shares are now oversold and our previous $9 PT is no longer relevant, given: 1) ongoing efforts to mitigate near-term liquidity drain, 2) dampened sentiment/large jump in short interest, and 3) ample liquidity provides years to heal the balance sheet (estimated y/e '16 liquidity of $4.7 billion). We know midstream arrangements remain burdensome, gas production remains unhedged and liquidity may decline by $2 billion by y/e '15. But so do most investors (12% Street Buy ratings, short interest +130% since 2/27). This suggests issues are priced in. Any positive catalyst may drive a short-squeeze rally in CHK shares. We recommend trading-oriented accounts cover shorts and initiate long positions."

For an analyst ratings summary and ratings history on Chesapeake Energy click here. For more ratings news on Chesapeake Energy click here.

Shares of Chesapeake Energy closed at $11.16 yesterday.



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