This Is What Drove Chesapeake Energy Corporation's Double-Digit Drop in October
Shares of Chesapeake Energy Corporation (NYSE: CHK) sold off in October, ending the month down 9.3%. The primary cause of that decline was a downgrade by analysts at Jefferies who, while noting the company's recent progress, still thought it was well behind rival drillers.
In early October, the Jefferies team downgraded Chesapeake Energy from hold to sell and set their price target at $2 per share. They did so citing the company's valuation and leverage. Overall, Jefferies said that Chesapeake "has made great strides to simplify the corporate structure and asset base." However, they noted that the company still has more than $9 billion in debt, which along with high fixed costs and a comparatively weak inventory of high-return drilling locations, made them less enthused by its prospects.
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Source: Fool.com
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