Canaccord Slashes Price Target for Energy XXI Ltd Amid Higher Interest Expense


Canaccord Genuity analyst Stephen Berman came out today with a research note on Energy XXI (NASDAQ:EXXI), reducing the price target to $5.50 (from $6.00), while maintaining a Buy rating. The new price target implies an upside of 70% from current levels.

Berman explained, “Our $5.50 price target represents a 35% discount to a ~$8.50 NAV. Our prior $6 target represented the same discount to a ~$9.35 NAV. The decline in NAV is driven by an increase in net debt from the second lien notes. We value proved reserves using long-term prices of $68/Bbl for oil and $4.10/Mcf for natural gas.”

However, “We like EXXI for its deep oil-weighted asset base on the Gulf of Mexico (GoM) Shelf and the long-term potential from advanced seismic-driven exploration. The company is presently focused on enhancing liquidity and lowering costs.”

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 -17.4% and a 29.6% success rate. Berman has a -47.9% average return when recommending EXXI, and is ranked #3494 out of 3511 analysts.

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