MLV: We See Halcon Resources’ Stock Outperforming As Oil Prices Recover
In a research report sent to investors today, MLV analyst Chad Mabry reiterated a Buy rating on Halcon Resources (NYSE:HK) with a price target of $2.50, which implies an upside of 53% from current levels.
Mabry wrote, “Sub-$50/Bbl oil equates to survival mode for the E&P sector. HK responded by drastically reducing its 2015 capital program to a level which preserves the business and allows the company to fight another day. While these measures are harsh, we view them to be necessary in order to preserve precious liquidity.”
Furthermore, “HK has been punished as a result of its overstretched balance sheet, but we see the stock outperforming as oil prices recover on the combination of (1) an improved liquidity outlook, (2) solid core assets in the Bakken and Eagle Ford, and (3) strong management that has experience weathering the downturns.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Chad Mabry has a total average return of -45.1% and a 5.7% success rate. Mabry has a -60.0% average return when recommending HK, and is ranked #3434 out of 3434 analysts.