HPK - HighPeak slides near YTD low as Truist hits with new Sell rating

2023-04-24 15:21:07 ET

HighPeak Energy ( NASDAQ: HPK ) -7.3% in Monday's trading after Truist Securities initiated coverage with a Sell recommendation and a $10 price target, citing a lack of free cash flow given forecasts for continued high capital spending expected to largely outweigh notable future production growth.

Further, limited liquidity likely will cause HighPeak ( HPK ) to need upcoming financing or potentially scale back activity, Truist analyst Neal Dingmann said.

"If the outspend occurs as we estimate, the company will not be able to consider any shareholder return like many of its peers," Dingmann wrote.

The analyst also initiated Chesapeake Energy ( NASDAQ: CHK ) with a Buy rating and $100 price target, believing that over time the stock should re-rate to a higher multiple closer to its large-cap peers through improving gas prices and investor sentiment, accretive acquisitions using the company's pristine balance sheet, or material activity on its shareholder return program.

HighPeak Energy ( HPK ) has sold off due after cutting its production forecast, but the company has very strong fundamentals, Fluidsdoc writes in an analysis published recently on Seeking Alpha .

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