NEW YORK (TheStreet) -- Magnum Hunter Resources (MHR) shares are down 5.79% to $1.54 in trading on Wednesday after the independent oil and gas company was downgraded to "underperform" from "in-line" by analysts' at Imperial Capital.
The firm also reduced the company's price target to $1.25 from $1.75, a potential 18.8% downside from the stock's current price.
The downgraded outlook comes after the company announced that proceeds from the sale of its West Virginia non-core segment are expected to be lower than initially anticipated.
The firm expects the company to outspend its cash flow for the rest of the year.
"We believe that in its current operating configuration the firm will outspend cash flow by roughly an equal amount in the latter three quarters of 2015. If the company were to raise all of the cash it has targeted through divestitures and JVs, then it likely would have enough liquidity to move through 2016, but would still need to raise considerable cash for 2017 activity," analysts said.
TheStreet Ratings team rates MAGNUM HUNTER RESOURCES CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAGNUM HUNTER RESOURCES CORP (MHR) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."