SWN - Southwestern Energy downgraded to Sell equivalent at Wells Fargo

Southwestern Energy (SWN -6.1%) slumps after Wells Fargo downgrades shares to Underweight from Equal Weight with a $10 price target, saying it will take time for shareholders to see benefits from its strategic entry into the Haynesville shale via two large acquisitions, as management focuses on debt reduction. Wells Fargo analyst Nitin Kumar thinks Southwestern will lag small- to mid-cap E&P peers in terms of cash yields until it achieves its debt reduction target to $3B-$3.5B compared with estimated $4.6B likely at year-end 2022. Given that 92% of gas volumes and 55% of natural gas liquids volumes are hedged in 2022 well below strip prices, Kumar sees limited upside to current cash flow estimates. Southwestern also likely will face headwinds from potential liquidations of stock held by private equity sellers Indigo and GeoSouthern in H1. Wells Fargo also downgraded Northern Oil & Gas (NOG -5.9%) to Equal Weight with a

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Southwestern Energy downgraded to Sell equivalent at Wells Fargo