NEW YORK (TheStreet) -- Shares of Chesapeake Energy (CHK) - Get Report were rising early Tuesday morning as the stock's rating was raised to "sector perform" from "underperform" at RBC Capital Markets.
The firm upped its price target to $8 from $7 on shares of the Oklahoma City-based natural gas, oil and natural gas liquids producer.
"Our rating and estimate changes reflect the lower cost structure and improved margin outlook over the next few years," the firm said.
Chesapeake's "runway for growth becomes more apparent" when considering the company's recent and upcoming improvements to its balance sheet, RBC noted.
"In a tough market, we think the balance sheet has been managed well but timing on debt reduction is open-ended outside of a convertible redemption," the firm added.
Chesapeake stock was climbing this morning despite lower oil prices as OPEC member Iraq said it would hope to reach an output deal that would allow the country to maintain its current production levels, Reuters reports.
In late September, OPEC agreed to a deal that would cut the organization's production by 700,000 barrels per day in November. This agreement would bring OPEC's output levels to between 32.5 million barrels per day and 33 million barrels per day.
Crude oil was down 0.42% to $50.31 per barrel while Brent crude was sliding 0.56% to $51.17 per barrel this morning.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "sell" with a ratings score of E+.
The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: CHK