Chesapeake's Stock Swings Sharply Lower Despite Analyst Upgrades

Shares of Chesapeake Energy Corp. turned sharply lower Friday, as upbeat analyst comments about the oil and gas company's analyst day weren't enough support the early gains. Bank of America Merrill Lynch analyst Doug Leggate said the worst for the company appears to have passed, so he raised his rating to neutral from underperform. "Chesapeake's first analyst day in two years closes a period of retrenchment and repair that clears the way for a return to growth," Leggate wrote in a note to clients. Analyst Lloyd Byrne at Nomura upgraded Chesapeake to neutral from reduce, saying the company's management "deserve a lot of credit for a substantive repositioning." Meanwhile, UBS analyst William Featherston kept his rating at sell but raised this stock price target to $6.00--11% below current levels--from $4.25, after the company highlighted "improved liquidity" and the steps it plans to take to cut its debt by up to $3 billion. Wunderlich's Jason Wrangler reiterated his buy rating, saying an improved balance sheet allows the company to "shift into growth mode." The stock was up as much as 2.9% within minutes of the open, but was recently down 2.3% in active trade. It has soared 50% year to date, while the SPDR Energy Select Sector ETF has run up 16% and the S&P 500 has gained 4.6%.