In a research report issued today, Canaccord Genuity analyst Stephen Berman raised the price target of Halcon Resources Corp (NYSE:HK) to $1.75 (from $1.25), but reiterated a Hold rating on shares. The report follows the company’s preliminary fourth-quarter results, which were released this morning.
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.”
The analyst explained his new price target saying, “Our $1.75 price target represents a 30% discount to a ~$2.50 NAV. Our prior $1.25 target reflected the same discount to a ~$1.75 NAV. The increase in NAV is mainly driven by the addition of proved reserves.”
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 -14.7% and a 35.5% success rate. Berman has a -22.9% average return when recommending HK, and is ranked #3452 out of 3476 analysts.