U.S. markets closed

Chesapeake Energy Corporation (CHK)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
Add to watchlist
45.03-1.15 (-2.49%)
At close: 4:00PM EST
Full screen
Trade prices are not sourced from all markets
Gain actionable insight from technical analysis on financial instruments, to help optimize your trading strategies
Chart Events
Bearishpattern detected


Previous Close46.18
Bid44.05 x 1400
Ask55.00 x 900
Day's Range44.03 - 47.01
52 Week Range41.55 - 48.79
Avg. Volume1,402,275
Market Cap4.409B
Beta (5Y Monthly)N/A
PE Ratio (TTM)N/A
Earnings DateN/A
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target EstN/A
Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected.
Fair Value
Research that delivers an independent perspective, consistent methodology and actionable insight
Related Research
View more
  • Chesapeake Energy Has a Fresh Start — Now It Looks Like a Bargain

    Chesapeake Energy Has a Fresh Start — Now It Looks Like a Bargain

    On Feb. 9, Chesapeake Energy (NASDAQ:CHK) came out of Chapter 11 bankruptcy. Now, CHK stock looks like a bargain. The company has no debt except for recently raised five-year notes for $1 billion. Source: IgorGolovniov / Shutterstock.com However, after receipts from warrants that are now in-the-money, the remaining net debt is only $71 million, according to an analyst writing in Seeking Alpha. More importantly, though, management now seems to have become quite serious about generating free cash flow (FCF). Chesapeake even says its FCF will be “sustainable.”InvestorPlace - Stock Market News, Stock Advice & Trading Tips For example, in its initial press release upon exiting bankruptcy, Chesapeake said it expects to generate large amounts of FCF — $2 billion on a cumulative basis over the next five years. Why CHK Stock Is a Bargain CHK stock now has 100 million shares. Using its Feb. 16 price of $43.60, Chesapeake’s market capitalization (before any of the warrants are exercised) is $4.36 billion. The $2 billion in FCF averages out to $400 million per year over five years. 7 Overvalued Stocks Investors Just Don’t Get Tired Of Therefore, an investor who intends to hold CHK stock for five years will make a very high FCF yield. For example, $400 million divided by $4.36 billion in market value works out to 9.17% per year on average. That, in essence, is why the stock is a bargain. Again, this assumes that the investor holds Chesapeake for the full five years and that the company is able to produce that $2 billion in FCF over the same period. If it is able to do that, you will likely see management initiate either a dividend, a share buyback program or both. This also assumes — as you might have guessed — that oil and gas prices stay relatively high over the next several years. They need to stay high enough for the company to produce these FCF levels. In that vein, Chesapeake Energy also released a very detailed operations presentation on Feb. 9. The company has become a low-cost operator focused mainly on natural gas in Pennsylvania’s Marcellus shale and the Haynesville region of Louisiana (Slide 12). That shows that Chesapeake now has a cost per barrel of oil equivalent (BOE) of between $13.60 to $15.05. The difference between those costs (plus admin and capex) and the market price of oil equivalent (currently over $59 per barrel) accrues to free cash flow. In other words, it is making a very good margin that will underline the “sustainable” nature of its FCF yield projections. What Will Happen At first glance, it appears that the company really does want to be a much more conservative and “sustainable” FCF generator, whatever that means. I’m keeping that word — “sustainable” — in quotes, since there are no guarantees with a commodity producer. For example, in the appendix to the presentation, Chesapeake points out that it has hedged or “locked in 75% of forecasted volumes for 2021” (Slide 21). The problem is that those locked-in prices are way below the market prices today. That makes the FCF it may be generating sustainable or guaranteed in one sense, but also missing out on the upside of a bull oil and gas market right now. So, maybe that conservative strategy might have to loosen up a little bit. That way, the company can participate in the bull market in energy prices expected for the rest of 2021 and 2022. Nevertheless, if Chesapeake can really produce $2 billion in FCF over the next several years, the market will reward CHK stock very handsomely. This will occur once the market realizes that the company has the wherewithal to begin dividend payments or buybacks. What to Do with Chesapeake Energy The enterprising investor who is willing to take management at their word might see CHK stock as a bargain. This assumes that the projected average 9.1% FCF yield comes to pass. Consider also an FCF yield around 5% or so. That implies that CHK is worth over 80% more. This is because, if you divide the average $400 million in FCF (see above) by 5%, the market value works out to $8 billion. Basically, CHK stock should be worth 83.48% higher ($8 billion divided by the Feb. 16 market value of $4.36 billion), implying that its target price for sometime over the next five years is $80 per share (before warrants). This works out to an average annual gain of 12.9% per year over five years. That is a reasonably good return, especially if dividends are paid along the way. On the date of publication, Mark R. Hake did not have (either directly or indirectly) any positions in the securities mentioned in this article Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post Chesapeake Energy Has a Fresh Start — Now It Looks Like a Bargain appeared first on InvestorPlace.

  • Chesapeake Energy cuts 15% of workers as it emerges from bankruptcy

    Chesapeake Energy cuts 15% of workers as it emerges from bankruptcy

    Once the second-largest U.S. natural gas producer, Chesapeake was felled by a long slide in gas prices. The company is "resetting our business to emerge a stronger and more competitive enterprise," according to the email to employees by Chief Executive Doug Lawler dated Tuesday, and reviewed by Reuters. Most of the 220 layoffs will happen at the Oklahoma City headquarters, the email said.

  • 15 Largest Gas Companies in the US
    Insider Monkey

    15 Largest Gas Companies in the US

    In this article, we are going to list the 15 largest gas companies in the US. Click to skip ahead and jump to the 5 largest gas companies in the US. Natural gas is fossil energy produced from decomposed organic matter, generally from ancient marine microorganisms that have been deposited over the last 550 million […]