NEW YORK (TheStreet) -- Shares of Chesapeake Energy Corp. (CHK) - Get Report are down by 3.01% to $13.70 at the start of trading on Thursday morning, after Sterne Agee lowered its rating on the natural gas and liquids producer to "underperform" from "neutral."

The firm said it reduced its rating on Chesapeake Energy due to its expectations of lower commodity prices.

"We see leverage trending toward 4.0x net debt/TTM EBITDA by y/e 2015. The near-term drilling focus in the Haynesville Shale and Mississippian Lime does not appear to be returns-focused, and CHK shares still trade at a premium multiple. Further, we see downside risk to our $2.70/mcf 2015 Henry Hub natural gas forecast (19% below consensus)," Sterne Agee said in a note this morning.

"We support management's moves to remove balance sheet opacity, but the prior regime's financing decisions are driving sub-optimal capital allocation amid depressed commodity prices. We acknowledge being late on this call given YTD underperformance, but we believe CHK shares remain overvalued as concerns on capital allocation and overall asset quality linger," Sterne continued.

Another factor adding to Chesapeake's fall today is the slump in the price of oil.

Crude oil (WTI) is retreating by 3.49% to $43.10 per barrel and Brent crude is slipping by 2.59% to $54.46 per barrel. Oil is down on renewed concerns regarding the global oversupply.

Insight from TheStreet's Research Team:

Sham Gad commented on Chesapeake Energy in a recent post on RealMoney.com. Here is what Gad had to say about the stock:

Chesapeake Energy is trading for around $13 a share. Shares have come under pressure after releasing financial results and providing 2015 guidance. The balance-sheet concerns are overblown in my view, as CHK continues to monetize assets. The company has a $1 billion share repurchase program and, at current prices, the company could buy back more than 10% of its shares.

-Sham Gad 'Time to Drill into Energy Stocks?' Originally Published on 3/18/2015 on RealMoney.com.

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Separately, TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHESAPEAKE ENERGY CORP (CHK) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself."

You can view the full analysis from the report here: CHK Ratings Report