NEW YORK (TheStreet) -- EP Energy Corp. (EPE) - Get Report stock is down by 16.52% to $5.71 in early-morning trading on Tuesday, after the company was downgraded to "neutral" from "outperform" at Credit Suisse. The firm maintained its price target of $4 on the stock.
The Houston-based exploration and production company was downgraded due to risks to the company's balance sheet, the firm said. During 2017, only about 34% of EP Energy's oil volumes are hedged, according to Credit Suisse.
"Given its stretched balance sheet, EPE is cutting back activity but with such large declines setting in, we see risks to the company's long term cash flows," the firm added.
Exploration and production companies could face a "bleaker reality" after 2016, which could be characterized by declining production and deteriorating balance sheets, Credit Suisse said.
Separately, recently, 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 rates this stock as a "sell" with a ratings score of D-. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: EPE