Dallas, Texas 06/29/2015 (Financialstrend) – Halcon Resources Corp (NYSE:HK), energy company, had been riding a rally, following its upgrade by Standard & Poor on June 23. However, the shares have lost most of the gains it made on Friday.
The earlier rally that the stock saw was due to the nature of the upgrade the energy producer received, this time around. S&P’s rating improved the company’s credit worthiness, moving it from previous ‘Selective Default rating’ (SD) to ‘B-’rating. The rating firm is of the opinion that Halcon Resources is not likely to enter any debt-for-equity transactions or distress exchanges. This tactically upgrades the company in terms of the debt. However, S&P persists with a negative outlook yet, implying Halcon Resources has just a breather to survive, even as the oil prices remain sluggish. S&P’s view Halcon Resources leverage is likely to deteriorate to expectations which are regarded as ‘unsustainable.’
Halcon Resources Corp (NYSE:HK) is involved in production, development as well as exploration of onshore liquids-rich oil as well as natural gas assets across locations of the United States.
Analysts recommend ‘hold’ rating
Analysts have been covering the stock in recent weeks. The average price target, by several analysts stands at $2.34 with $3 as the upper range and lower estimate at $1. The consensus rating from about twenty brokerages indicates ‘hold’ rating. Additionally seven analysts inclined towards ‘sell’ rating. Five of the analysts recommend ‘buy’ rating and eight of them recommend ‘hold’ rating. The stock has also been reporting unusual volume in the past week.
However, Halcon Resources Corp (NYSE:HK) latest quarterly reports, filed on May 5, 2015 saw the company lagging behind expected estimates. EPS reported was $0.04 while revenue was $136.20 million as against expected revenue of $227.61 million. Experts remark that the quarterly revenue had slipped by 50.5% on an annual basis, even as the outlook for the current fiscal lacks positivity.
Many analysts now rate the company ‘hold’ after a ‘sell’ rating in May. The S&P upgrade has definitely been a factor which has driven the change in rating, favoring the independent energy producer, by analysts.