Canaccord Maintains Hold On Halcon Resources Following Q4 Results And 2015 Outlook
In a research report issued today, Canaccord Genuity analyst Stephen Berman maintained a Hold rating on Halcon Resources (NYSE:HK) with a $1.75 price target, following the company’s fourth-quarter results, posting EPS/CFPS of $0.05/$0.30 compared to Canaccord’s estimates of $0.00/$0.34 and consensus estimates of $0.00/$0.28.
Berman noted, “HK has built positions in the Williston Basin (WB) and the Eagle Ford (EF), two leading liquids-rich US resource plays, with good optionality on a third, the Tuscaloosa Marine Shale (TMS). While the company has solid WB and EF acreage positions in our view, high financial leverage and a premium valuation keep us on the sidelines.”
“Our $1.75 price target represents a 25% discount to a $2.30 NAV. We previously had been using a 30% discount to a $2.50 NAV. The decline in NAV is primarily driven by an increase in net debt, while the narrower discount is a function of what we perceive to be an improved financial risk profile. We value proved reserves using long-term prices of $68/Bbl for oil and $4.10/Mcf for natural gas.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst HK has a total average return of -15.5% and a 33.3% success rate. Berman has a -22.9% average return when recommending HK, and is ranked #3471 out of 3492 analysts.