Chesapeake Outlook Is ‘Less and Less Plausible’: Analyst
Despite news that Chesapeake Energy has named a new chairman and four other independent directors, one analyst told CNBC that the company’s current guidance is looking “less and less plausible every day.”
In an interview with CNBC’s “Squawk on the Street,”Tim Rezvan, an analyst at Sterne Agee, named $14 as a possible floor for Chesapeake shares, which opened just above $19 on Thursday. He has a “neutral” rating on the stock, which he called “rangebound.”
“To get bullish on the stock, you really do need to have a strong outlook on natural gas prices, and at this point, you really have to revisit 2013 spending plans,” Rezvan said. “I think the new board has a lot of heavy lifting in front of it to kind of redefine how 2013 spending will look. I think current guidance is looking less and less plausible every day.”
The company named former ConocoPhillipsChairman Archie Dunham as its new chairman on Thursday, the latest development in an ongoing board shuffle. Dunham will replace Chief Executive Aubrey McClendon in the role.
“The big news from the announcement that Dunham is coming on is that it is unlikely that he would move to the role of a full-time CEO,” Rezvan said.
There had been speculation that the board would possibly choose a younger candidate who would wear both the CEO and chairman hats if pressure grew to have McClendon ousted, Rezvan added.
Still, this does not necessarily mean that McClendon has a firm grip on the chief position.
“It remains to be seen,” he said. “We’ll have to see how some of the deals play out and how the commodity price environment looks heading into 2013 to see how his aggressive strategy has really played out.”
—By CNBC.com’s Katie Little
Additional News: Sinopec Eyes Billions in Chesapeake Assets
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No disclosure information was available for Tim Rezvan.
Follow Katie Little on Twitter @katie_little.