Chesapeake Energy Corporation (CHK) Stock Is Worth the Long-Term Chance

Analysts at Imperial Capital lifted target price for shares of Chesapeake Energy Corporation (NYSE:CHK) but repeated their In-line recommendation for the stock in their opinion released on January 10. The price target has been raised from $5 to $3. BofA/Merrill analysts have downgraded their rating of CHK stock from Neutral to Underperform in a separate flash note to investors on January 04. Analysts at CapitalOne downgraded the stock to a Underweight call from its previous Overweight stance, in a research note that dated back to December 20.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Chesapeake Energy Corporation (NYSE:CHK)’s prospects. The earliest insider trade took place on 12/24/2018. Ryan Thomas L gathered a total of 200 thousand shares of company at average share price of $1.81. The total for the purchase was set at $362 thousand. After this transaction, the Director account balance stood at 743.52 thousand shares. The stock grew 51.38 percent since that insider purchase. On 12/21/2018, Pigott M. Jason, EVP – Operations, purchased 11 thousand shares at a price per share of $1.93. This added 21.23 thousand shares to the insider’s fortune and the stock saw a 41.97 percent rally in value since the news became public. This transaction left 995.89 thousand shares in the EVP – Operations account. On 12/21/2018, Director Dunham Archie W performed a purchase transaction worth $4.14 million. This purchase at $1.97 each has added 2.1 million shares into the insider’s portfolio position. Meanwhile, shares have recorded 39.09 percent increase since the transaction was reported. The insider now is left with 9.35 million shares remaining in the account. Dell’Osso Domenic J Jr, who performs the Exec. Vice President & CFO job, bought 50 thousand shares for $94 thousand. The acquisition occurred on 12/20/2018 was priced at $1.88 per share. The share price soared 45.74 percent since the reporting date. Dell’Osso Domenic J Jr now left with a stake of 1.4 million CHK stock worth $3.77 million after the insider buying.

Chesapeake Energy Corporation (CHK) is expected to jump by 16.36 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $5price as 12-month high target. This represents a whopping 85.87 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $3, which represents a return potential of 11.52 percent when compared to the closing price of the stock of $2.69 on Wednesday, January 23. The lowest price target for the stock is $0.5 — slightly more than -81.41 percent from CHK’s current share price.

The shares are currently floating around the first support level of $2.62. Below this, the next support is placed in the zone of $2.54. Till the time, the CHK stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 52.21 on daily chart, which may remain a cause for concern. If the price breaks below $2.54 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $2.8 mark may result into a pull-back move towards $2.9 level.

CHK shares dropped -0.05 points or -1.82 percent on Wednesday to $2.69 with a light trade volume of 39.377 million shares. After opening the session at $2.79, the shares went as high as $2.83 and as low as $2.65, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $2.45 billion and now has 910 million shares outstanding. Chesapeake Energy Corporation (CHK) stock has gained 46.2 percent of market value in 21 trading days.

CHK stock has a trailing 3-year beta of 2.37, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.62 a share in the trailing twelve months. The stock’s value has surged 28.1 percent year to date (YTD) against a decline of -32.24 percent in 12 month’s time. The company’s shares still trade -51.96 percent away from its 1-year high of $5.60 and 57.31 percent up from 52-week low of $1.71. The average consensus rating on the company is 3.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Shares of Chesapeake Energy Corporation (CHK) are trading at a P/E ratio of 0 times earnings reported for the past 12 months. The industry CHK operates in has an average P/E of 14.33. Its P/E ratio went as low as 11.87X and as high as 35.36 over the 5-year span. Further, it is sporting a 0.25 on the Price-to-Sales ratio. Compare this with the industry average P/S of 99.87. 78.1 percent is the gross profit margin for Chesapeake Energy Corporation and operating margin sits at 10.1 percent. Along with this, the net profit margin is 6.1 percent.