Wednesday, KeyBanc Capital initiated coverage of Petrohawk Energy Corp. (HK) stock with a Buy rating and a price target of $35.
Analyst Mitchell Wurschmidt believes HK has the highest relative, quality, acreage position in the Haynesville and Eagle Ford Shale plays and is the best way for investors to gain exposure to what he believes are two of the most economic natural gas plays in the United States.
The analyst said that following a recent equity offering and announced sale of its Permian Basin assets, HK is sitting with more than $1.7 billion of liquidity, including more than $840.0 million of cash on its balance sheet, assuming closing of Permian sale.
For 2010 and 2011, the analyst is projecting debt-adjusted production growth of 31.8% and 27.5% and debt-adjusted reserve growth of 52.2% and 37.2%. The analyst believes there are very few E&P companies posting this kind of debt-adjusted growth in high rate of return shale plays.
The analyst's price target of $35 is based on his RNAV estimate of $45.00 per share. On an EV/DCF basis, HK is presently trading at 11.9x and 8.0x for 2010 and 2011, vs. peers at 11.5x and 8.7x. Several of HK's peers, which the analyst believes are even closer comps given acreage sizes and growth outlooks, trade at more than 15.0x for 2010 and 11.0x for 2011.
Currently, HK is up $0.66 or 2.51% and trading at $26.96.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.