Dallas, Texas 11/01/2013 (Financialstrend) – The S&P 500 tracked Chesapeake Energy Corporation (NYSE:CHK) has a market cap of $18.26 billion. In the run up to its third quarter results announcement the stock has got a vote of confidence from two well regarded rating agencies. Citigroup raised the rating for this integrated oil retailer from neutral to a buy. It also increased its price target for the stock from 427 to $35 by taking into account the potential the stock has to post appreciation in price and the possibilities of earnings increase thanks to the cost cutting measures. The energy desk analysts at Citi have forecasted that “oil production is all set to go up from this underachieving oil giant” and the current market price has not yet worked this into their price evaluations.
The oil firm which reported sales of $14.6 billion over the past 12 months is scheduled to announce its third quarter results next week. Over the past few months the stock has been under the pump since its operations were not supporting its price appreciation at the browsers. It was suffering from a lopsided debt to income ration, primarily due to the erratic price fluctuations. The company had brought in Doug Lawler in the place of Aubrey McClendon as its chief executive officer. He started off by shedding noncore assets and concentrating on cost cutting measures to increase the bottom line. In order to cope with the gas price volatility, the firm focused on changing its product mix from a predominantly gas based to a more liquid based product output. The coming results are expected to show the effectiveness of the ongoing restructuring efforts. Analysts are expecting a earnings per share of $0.41 per share and estimates revenue to come in at $3.48 billion. As of close of business on October 31, the stock has been trading at $27.96 per share.