This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Chesapeake Energy's Chart Speaks Volumes to Investors

NEW YORK (The Street) -- The investment community is taking a sharper interest in Chesapeake Energy (CHK - Get Report) since a downgrade Tuesday, trying to figure out this controversial energy giant.

CHK, whose shares closed at $25.85 Wednesday and trades on average daily volume of over nine million shares, have taken an 11% "haircut" since the stock hit its 52-week high of $29.06 on Nov. 4. For the year to date, shares are down nearly 6%.

On Tuesday the analysts at Bank of America downgraded CHK to neutral from buy and reduced the price target to $31 from $36. There had been a "recovery thesis" underlying the stock's rating when the share price was significantly lower. That recovery thesis has evidently played itself out.

The Oklahoma City company is the second-largest producer of natural gas, the 11th largest producer of oil and natural gas liquids and the most active driller of onshore wells in the U.S., according to its Web site.

The extent of its operations and areas of exploration and development are downright impressive, including holdings in the Eagle Ford, Marcellus, Haynesville/Bossier, Utica, Granite Wash, Cleveland, Tonkawa, Mississippi Lime and Niobrara unconventional liquids and natural gas shale plays. CHK also controls large marketing and oilfield services operations through its subsidiaries Chesapeake Energy Marketing and Chesapeake Oil Services.

Sometime between Feb. 17 and Feb. 21 the company will announce earnings results for the fourth quarter of 2013, and expectations are high. The average analysts' estimate on earnings per share for the quarter is an increase of around 65%. That may help explain why its share price had appreciated about 48% in the past year.

The same community of analysts who cover CHK are anticipating sales growth for the fourth quarter to come in at around a 31% increase. Revenue for the year is expected to be over $17.3 billion, up almost 78% during the time period from the 52-week low of $16.37 to the 52-week high of $29.06 on Nov 4. The company made great strides in 2013 to improve efficiency across the board, including steps to increase free cash flow. At the end of its third quarter its trailing 12-month (TTM) levered free cash flow was a minus $3.6 billion.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CHK $6.87 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs