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Chesapeake -6.5% as Macquarie cuts to Sell, says ill equipped for cheaper oil

Published 06/21/2017, 01:07 PM
© Reuters.  Chesapeake -6.5% as Macquarie cuts to Sell, says ill equipped for cheaper oil
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  • Chesapeake Energy (CHK -6.6%) plunges amid continued weakness among oil and gas companies and Macquarie's downgrade of CHK shares to Underperform - the firm's equivalent of a Sell rating - from Neutral with a $3.50 price target, slashed from $6.
  • Macquarie's Paul Grigel says the lower outlook for crude oil prices pressures CHK's fundamentals given the company's recent efforts to increase its oil exposure over natural gas.
  • "While the company has made strides in repositioning itself, it simply isn't far enough along to sustainably compete in a lower-for-longer crude world," Grigel writes.
  • Even though CHK has been selling assets to pay down its high debt load, Grigel still estimates a "material outspend on high leverage with concerns around liquidity."
  • Now read: Why I Have High Hopes For Chesapeake (William Koldus)


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