NEW YORK (TheStreet) -- Penn West Petroleum (PWE) shares are down 3.7% to $3.39 in early market trading on Monday after the Canadian oil exploration and production company had its rating downgraded to "underperform" from "market perform" by analysts at BMO Capital Markets on Monday.
The firm lowered the company's price target to $6 from $6.75, while also cutting its dividend forecast for next year by 35% to 36 cent per share annualized from 56 cents per share.
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Analysts at the firm believe that the company will lower its capex program spending guidance of $840 million in addition to lowering its dividend payout as a result of lowered commodity prices as the price of a barrel of oil continues to fall.
"The company is relatively more leveraged than its peers and has no oil production hedged for 2015; Penn West is targeting additional asset sales that would strengthen the balance sheet but may have difficulty selling low cash flow generating assets in the current commodity price environment. We believe the market for oil and gas assets has shifted in favour of the buyers," said the firm.
TheStreet Ratings team rates PENN WEST PETROLEUM LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: