Mon, Aug. 3, 2:26 PM
- Linn Energy (LINE -18.7%) and LinnCo (LNCO -15.9%) continue their three-day slide which began last Thursday following their surprise announcement to suspend distributions; both have suffered ~50% declines during the period.
- At least two more analysts weighed in with negative comments today following two downgrades last Friday; RBC Capital cut LINE and LNCO to Sector Perform from Outperform while lowering its price target for both to $5, saying the lack of a dividend means “investor appetite is likely to remain anemic for the foreseeable future" even though the dividend suspension was "the right step," and Citi also lowers its price target to $5 but keeps a neutral High Risk rating on LINE/LNCO.
- Barron’s Andrew Bary also jumped in over the weekend, writing that LINE/LNCO could lose many retail investors without a fat distribution, and may find itself valued based on conventional energy-company methods.
Mon, Aug. 3, 12:46 PM
Mon, Aug. 3, 9:18 AM
Fri, Jul. 31, 1:42 PM
- Linn Energy (NASDAQ:LINE) and LinnCo (NASDAQ:LNCO) are piling on losses -- LINE is -14.5% today, adding on to yesterday's 26.3% drop, and LNCO -12.9% after yesterday's 29.3% fall -- the day after LINE said it planned to suspend distributions starting in October.
- Downgrades have come fast and heavy. Credit Suisse's John Edwards dropped ratings on the firms to Underperform on a limited ability to take out more debt: "Given LINE’s 2016 Debt/EBITDA leverage over 5x, raising additional debt to finance growth also appears challenging. We struggle to visualize accretive transactions with LINE’s current capital structure and don’t model any future distribution payments given the leverage."
- Edwards set a $5 price target on LINE and LNCO, down from $10. LINE shares closed yesterday at $4.76, and LNCO at $4.41.
- JPMorgan's Gabriel Daoud Jr. downgraded to Underperform as well, given that "the majority of MLP investors remain income orientated" and considering the lack of yield. He set a $5 target on LINE as well.
- Stifel Nicolaus has lowered its price target on LINE to $7.
Thu, Jul. 30, 12:47 PM
Thu, Jul. 30, 10:54 AM
- Linn Energy (LINE -16.9%) and LinnCo (LNCO -22.6%) plunge after LINE says it plans to suspend distributions later in the year, saving $450M; LINE plans to pay the distribution in August and September and suspend it starting in October.
- Raymond James analyst Kevin Smith downgrades LINE/LNCO to Market Perform, saying he was “very surprised by management’s decision to fully suspend the distribution" - just last week, he had lowered the companies to Outperform from Strong Buy.
- LINE also says it is buying back nearly $600M of senior debt from creditors at a 35% discount; by repurchasing a total of $783M in its debt this year, LINE says it is saving ~$54M/year in interest charges.
Thu, Jul. 30, 9:12 AM
- Gainers: UNXL +33%. UNIS +22%. MEET +18%. GEVO +17%. SHOP +15%. OTEX +15%. WWE +15%. SGYP +13%. SKX +12%. MWW +9%. HBP +8%. HOLX +8%. WDC +8%. APD +6%.
- Losers: PRSN -35%. LNCO -21%. LINE -19%. FMI -18%. SSYS -18%. ITG -14%. FOE -13%. WFM -12%. QRVO -12%. OSK -11%. LOCK -11%. DDD -9%. MNKD -7%. NCR -6%. GNCA -6%. FMS -5%. MPC -5%. CROX -5%.
Thu, Jul. 30, 6:45 AM
Tue, Jul. 21, 10:47 AM
- LinnCo (LNCO +4.1%) is downgraded to Outperform from Strong Buy with a $9 price target, down from $15, by Raymond James analyst Keven Smith, a longtime supporter of LNCO and Linn Energy (LINE +4.4%).
- Smith's positive view on LNCO has been based on Linn’s strong hedging book, low decline asset base, and unique ability to acquire E&P C-corps which mitigated the weakness of the oil markets; given the YTD lack of acquisitions and the higher equity cost of capital due to a lower stock price, he is dialing back acquisition expectations for the partnership and his forecast for Linn’s sustainable distribution rate.
- Smith also drops his price target on LINE to $8 from $14 while maintaining his outperform rating, predicting LINE will need to lower its distribution in 2016 if oil remains below $60.
- Smith also downgrades Atlas Resource Partners (ARP +1%) to Underperform, saying ARP could hit its leverage covenant of 5.25x its trailing 12-month total debt/EBITDA ratio; he expects ARP and Memorial Production Partners (MEMP +1.4%) to cut their distribution rates.
Mon, Jul. 13, 3:14 PM
- Linn Energy (LINE, LNCO) is sharply lower, and the apparent reason is a negative comment from Jim Cramer, who said of the company during the lightning round of his CNBC show, “I think the company's future is hampered, and I’m not going to recommend the stock.”
- "These are small stocks and comments like his can have an impact,” says an MLP ETF portfolio manager; Cramer's comments did not seem to scare investors in Procter & Gamble or DuPont, other stocks criticized on the show.
- Last week, Linn announced new partnerships to develop properties as well as a deal to sell some assets, but analysts remain concerned about debt.
- LINE -6.4%, LNCO -7.7%.
Tue, Jul. 7, 2:59 PM
- Linn Energy's (LINE -0.8%) new partnerships to develop properties and a deal to sell some assets generally were well received by analysts, but its shares and those of sister company LinnCo (LNCO -0.7%) are lower.
- While UBS sees some improvements, the firm still rates both companies at Sell and expects Linn will need to cut its distribution in Q4, with the likelihood of increasingly unfavorable impacts to debt facilities during the fall redetermination over vs. this spring if commodity prices remain weak.
- UBS raises its earnings estimates for LINE based on the asset sale, which will help pay down debt and reduce interest costs, but it cuts its price target for LINCO to $8 from $9 due to reduced distributions.
Mon, Jul. 6, 5:45 PM
- Financial Times appreciates the creativity Linn Energy (LINE, LNCO) is showing in trying to maintain its payout to investors, potentially finding a way to keep growing so the company can support and expand its dividend at a time when preserving cash is paramount.
- In January, Linn cut its dividend by more than 50% but also announced a financing joint venture with a P-E firm which would fund $500M in drilling costs in exchange for getting a preferred return, and in March, it unveiled a $1B vehicle with another firm to fund acquisitions of oil and gas acreage; today, Linn finally closed those deals, allaying concerns that they may not get completed.
- Cash flow did not cover Linn's dividend in Q1, and fears of a repeat have persisted, but if the MLP has found a way to withstand the oil rout, look for its yield to normalize, not because its dividend will be cut, but because its share price will rise, FT writes.
Mon, Jul. 6, 8:57 AM
- Linn Energy (LINE, LNCO) agrees to sell its remaining position in the Permian Basin's Wolfcamp Shale to an undisclosed buyer for $281M.
- The properties sold under the deal include ~6,400 net acres prospective for horizontal Wolfcamp drilling and ~2K boe/day of current production from 133 gross wells.
- LINE -0.9%, LNCO -1.9% premarket.
- Earlier: Linn Energy inks $1.5B in funding agreements
Mon, Jul. 6, 8:19 AM
- Linn Energy (LINE, LNCO) says private capital investor Quantum Energy Partners agrees to initially commit up to $1B to fund selected future oil and natural gas acquisitions and the development of acquired assets.
- According to the terms, Linn will have the ability to participate in all acquisition opportunities with a direct working interest ranging from 15% to 50%.
- Also, Blackstone's (NYSE:BX) GSO Capital Partners agrees to commit up to $500M to fund drilling programs on locations provided by Linn.
- According to these terms, GSO will fund 100% of the costs associated with the new wells drilled and will receive an 85% working interest until it achieves a 15% IRR on annual groupings of wells.
Wed, Jul. 1, 4:50 PM
Wed, Jul. 1, 11:22 AM
- Concerns about Linn Energy’s (LINE -0.9%) leverage and ability to pay its distribution are overdone, Raymond James analysts says as they reiterate an Outperform rating and $14 price target on LINE and a Strong Buy recommendation and $15 target for LinnCo (LNCO -1.9%).
- James believes the market continues to underestimate Linn’s base cash flow business, along with the impact of its multi-year hedge book and its acquisition opportunities.
- The firm cites several positive catalysts on the horizon, including the anticipated finalizing of both its acquisition alliance with Quantum Energy and drilling alliance with GSO Capital, the potential monetization of its remaining 6,600 net acres in the Permian, and well results from its Terryville field acreage in Louisiana.
LINE vs. ETF Alternatives
Linn Energy LLC is an independent oil and natural gas company. The Company's properties are located in United States in Rockies, Hugoton Basin, California, East Texas and north Louisiana, Mid-Continent, Permian Basin, Michigan/Illinois and South Texas.
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