Analysts At Wunderlich Have High Expectations From Chesapeake

Wunderlich analysts have upgraded their ratings on the energy company's shares and granted a 'buy' rating on the stock

Chesapeake Energy Corporation has been under the spell of bears for quite some time now, keeping in mind the falling prices of oil in the oil industry on a global level. The oil company has even gone forward to cut down its capital expenditures which were announced in a recent press release held by the company. According to data available, it was seen that this company was not the only company of its kind to have made its expenditures lesser than before because the dip in crude oil prices has affected all the companies globally. Re-adjustment of expenses is a factor that all the companies of this industry need to keep an eye on.

On an average, Chesapeake has been receiving negative comments and ratings from almost all the firms who have been covering the stock of the company. However, one equity firm feels different from the stock of the energy company. Wunderlich has analysts who have covered the company’s stock very closely and have suggested a ‘buy’ rating to it. The price target that has been set by the analysts has come around to $24. This has surprised many other analysts as the oil drilling company has only been receiving negative ratings lately. The positivity that has been shown by the analysis shows that they have a strong belief that the company will be soon be reporting strong sales with the share price soaring higher than expectations.

The fact that Chesapeake has lowered its costs and expenses is one of the reasons why analyst firms seem to be so positive about the increment in the profits of the company.

The oil company has so far not managed to raise its share price by cutting off on the expenditures. Considering this fact, the analysts declared that this is going to work in the company’s favor as this way the company will make its base stronger than before.

The fact that the energy company thought of lowering expenditures has also been taken as a positive sign. The downturn that the oil industry has been thrown into has driven all the oil companies to take measures that would save their companies from loss. Similarly, the steps that the oil and gas company has taken to face this difficult time have been approved by analysts.

Chesapeake Energy has successfully cut off its expenses of $500 billion to only $3.5 billion now. These changes have been made for the current fiscal year of 2015. Previously, the expenses of 2014 were recorded at a price of $6.62 billion.