MLV Cuts Halcon Resources Price Target On Reduced Activity

In a research report sent to investors yesterday, MLV analyst Chad Mabry reiterated a Buy rating on Halcon Resources (NYSE:HK) and reduced his price target to $6 (from $7), which still represents a potential upside of 97% from where the stock is currently trading.

Mabry commented: “The company posted another strong quarter of operational performance in its core areas. Preliminary 2015 D&C capex of $750-$800 million is expected to support 6 operated rigs—down from prior projections of 11—and 2015 production growth of 15%-20%. Unfortunately, HK’s positive results were overshadowed by its reduced capital spending, which seemed to be interpreted as a no confidence vote in its newest play, the Tuscaloosa Marine Shale. While we applaud management’s financially prudent decision to continue allocating capital to its highest returning projects, the lower activity levels result in our NAVbased target price slipping to $6. We remain buyers on HK’s best-inclass execution and see the stock outperforming as oil prices normalize.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Chad Mabry has a total average return of -26.5% and a 18.5% success rate. Mabry has a -43.0% average return when recommending HK, and is ranked #3355 out of 3367 analysts.

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