Canaccord analyst Stephen Berman weighed in with a few insights on Energy XXI Ltd (NASDAQ:EXXI), following yesterday’s news that the company has executed a purchase and sale agreement to monetize the Grand Isle Gathering System to CorEnergy Infrastructure Trust for $245 million in cash plus the assumption of $12.5 million in asset retirement obligations related to the assets. The company also announced that it has reached an agreement with the Bureau of Ocean Energy Management (BOEM) with regard to supplemental bonding requirements for the company and its subsidiaries.
Berman noted, “Both pieces of news remove overhangs/uncertainties from the equation and should be viewed favorably by the markets in our view. That said, EXXI still has a lot of work to do in terms of cleaning up its complex debt structure. We expect any news flow on the debt front to be a primary driver of the stock over the coming weeks and months.”
The analyst reiterated a Buy rating on the stock with a $5.00 price target, which represents a potential upside of 62% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Stephen Berman has a total average return of -19.7% and a 27.1% success rate. Berman has a -39.8% average return when recommending EXXI, and is ranked #3634 out of 3640 analysts.
Out of the 7 analysts polled by TipRanks, 2 rate Energy XXI stock a Buy, 4 rate the stock a Hold and 1 recommends Sell. With a return potential of 370.8%, the stock’s consensus target price stands at $14.50.