Shareholders of LendingClub Corp (NYSE:LC) and Gastar Exploration Inc (NYSEMKT:GST) are having a rough day; the companies’ stocks have dropped sharply following loan-sale abuse and disappointing earnings. Let’s take a look and see what analysts have to say about LC and GST.
LendingClub shares lost more than one-quarter of their value today, after the peer-to-peer finance company announced that its founder Renaud Laplanche resigned as CEO and chairman Monday after a review of $22 million in loans to a single investor that didn’t conform to the investor’s instructions.
In reaction, William Blair analyst Ralph Schackart suspended his rating on Lending Club shares.
Schackart noted, “Lending Club’s board of directors conducted a review, under the supervision of a subcommittee of the board and with the assistance of outside advisors, that found the violation of the company’s business practices along with the lack of full disclosure during the review to be unacceptable. In addition to Mr. Laplanche’s resignation, two other senior managers involved in the sales of the $22 million loans either resigned or were terminated. The board’s review also uncovered an unrelated material weakness in internal control in financial reporting related to the failure to disclose personal investment interests held in a third-party fund.”
“Given the circumstances described above, we are suspending our rating on Lending Club shares given the lack of information necessary to make an investment decision,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ralph Schackart has a yearly average return of 5% and a 52% success rate. Schackart is ranked #795 out of 3904 analysts.
Gastar Exploration Inc
In a research report released Monday, Canaccord analyst Stephen Berman reiterated a Buy rating on shares of Gastar Exploration, with a price target of $1.50, following the release of the company’s first-quarter earnings results, which fell way below consensus.
Gastar reported Q1 EPS of ($0.22), $0.04 worse than the analyst estimate of ($0.18). Revenue for the quarter came in at $14.81 million versus the consensus estimate of $17.08 million. Investors reacted to the earnings miss, sending shares down 16% to $1.07.
Berman commented, “GST reported Q1 adjusted EPS/CFPS of $(0.22)/$0.04 vs. our estimates of $(0.17)/ $0.00 and consensus of $(0.18)/($0.04). Production for the quarter (Mid-con only) was 6.1 MBoe/d, below our estimate and consensus of 6.6 MBoe/d and company guidance of 6.4-6.9 MBoe/d. Production was negatively impacted by ~600 Boe/d due to weather, pump repairs and a brief third-party pipeline repair of the system servicing the company’s WEHLU acreage. In addition to production, earnings were negatively impacted by poor price realizations. Q2/16 production guidance of 6.0-6.4 MBoe/d was provided. We are now modeling 6.2 MBoe/d for Q2/16, down from 6.5 MBoe/d.”
According to TipRanks.com, analyst Stephen Berman has a yearly average return of -21% and a 32% success rate. Berman has a 11.3% average return when recommending GST, and is ranked #3817 out of 3904 analysts.
Out of the 8 analysts polled by TipRanks, 5 rate Gastar Exploration stock a Hold, while 3 rate the stock a Buy. With a return potential of 120%, the stock’s consensus target price stands at $2.39.