Dallas, Texas 02/12/2014 (FINANCIALSTRENDS) – The $1.36 billion market capped EXCO Resources Inc (NYSE:XCO) has been at the receiving end of analyst downgrades over the past couple of weeks, in the run up to its 4Q and full year operations result announcement slated for 26th February.
Barclays was the latest agency to downgrade the stock of EXCO Resources Inc (NYSE:XCO) from its previous rating of Equal Weight to current Underweight. In the commentary which accompanied the downgrade, the rating agency highlighted the “negative balance sheet” in addition to the lower than estimated increase in the production forecast were the main reasons for the downgrade. It has also reduced the price target of the stock from earlier $8 to $5.
Earlier to this latest downgrade, on the 24th of January, EXCO Resources Inc (NYSE:XCO) had earned a downgrade from trading house Tudor Pickering. The analysts for Tudor had called out a Sell call on the stock from their previous Hold position. The reasons for the downgrade were ascribed to be the inflated valuation of the stock, accompanied by a larger cost to asset base, in addition to underlying concerns about the funding of the firm’s operations.
It is of relevancy to note here that the downgrades come on the back of EXCO Resources Inc (NYSE:XCO) announcing the closing of rights offer of 28.2 million shares. Most of the shares on offer were bought out by its existing share holders. WL Ross & Co. LLC with a share hording of 51,104,050 has a 18.7 percent hold on the common stocks issued, while Oaktree Capital Group Holdings GP, LLC and Hamblin Watsa Investment Counsel Ltd have 16.6 percent and 6.4 percent of the total shares issued by the drug maker.
EXCO Resources Inc (NYSE:XCO) Non-Executive Chairman of the Board Jeffrey D. Benjamin had quoted at that time that , “We are very pleased by the support of our existing shareholders and their participation has helped strengthen EXCO.”