The oil company has received a hold rating from analysts due to the falling oil and gas prices in the global market.
Chesapeake Energy has recently been rated by the analysts at equity firm Argus and a detailed account has been released by the analysts who believe that currently the investors in the oil digging company should hold back their shares and trade cautiously.
A rating of ‘hold’ has been granted to the oil stock taking into consideration the changes in the oil industry that has been observed lately. Such a rating given by the analysts has been released due to the many changes in the nature of the stock due to the falling oil prices. On the other hand, it should also be taken into consideration that if the current year is compared to the year before, it will be seen that the value of the oil has fallen by around 39 percent.
The analysts at Argus are also of the opinion that presently it is not possible to say that Chesapeake stock is going to perform in a better way in the future as the oil and gas prices are expected to stay in a declining position for some time. The financial firm has also cut down the estimations it made on the gas price of Henry Hub for the year of 2015 and has brought it down to $3 million from $3.5 million. However, even after all the negative changes being brought about on the stock, the analysts have yet not given a bearish verdict on the future of the firm due to a few reasons. It is to be believed by them that the oil company has managed to hold itself from falling despite the uncertainty in the oil prices that seemed to leave no other way for it.
Recently, it was also seen that Chesapeake management head CEO Doug Lawler sold quite a lot of the assets belonging to the company namely of Utica and Southern Marcellus which has backed up the oil field services providers in a much positive way. Analysts now believe that the firm has a chance to cut down on the net debt as well and give more money towards the capital expenditure. Furthermore, this will also help the oil company to raise more cash by investing more in the business.
However, Chesapeake is believed to still in trouble according to Argus analysts as the firm is a little too dependent on the price of natural gas and oil which has been stated as a problem by the analysts. The more the prices fluctuate, the more problems the firm is expected to face to balance itself on the stock market.
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