Seeking Alpha

Chesapeake cut to Hold at Stifel on fair valuation

  • Chesapeake Energy (CHK -0.9%) is downgraded to Hold from Buy at Stifel Nicolaus on fair valuation, expectations for no production growth heading into 2014, and a view that ongoing efficiency improvements and additional potential non-core asset sales will not add enough meaningful upside potential to shares.
  • Stifel thinks investors will begin to shift their investment focus from P/NAV discounts to EBITDA multiples and the growth outlook for CHK; as the shift happens, CHK looks fairly valued on an absolute basis and will underperform relative to its peers, the firm believes.
Comments (1)
  • Considering they have no idea what the actual NAV is, and considering they do not have any idea how investors will choose to value the company at a given point in time, they have a very good chance to be wrong, especially considering their growth outlook. Even production mix is not on the side of their call, even if growth has slowed.
    14 Oct 2013, 02:24 AM Reply Like
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