Chesapeake Energy Corp.: Priced For Disaster

Chesapeake Energy Corp.'s (CHK) shares keep disappointing investors even though the market environment is quite favorable for energy companies. Energy prices have rebounded and the trade war between the United States and China had been deescalated at the G-20 meeting in Japan last month. Chesapeake Energy Corp. is deeply undervalued after the latest slump, and shares have potential to double in the event the oil and natural gas drillers report solid Q2-2019 earnings and oil prices tick up.

Chesapeake Energy Corp. is priced for disaster and the oil and natural gas driller's stock price closed at multi-year lows on Friday, even though the energy market environment is actually not that bad: Oil prices have recovered and Chesapeake Energy Corp. has actually gone on the offensive and pulled off some acquisitions lately. I think investors have turned too bearish on Chesapeake Energy Corp., and the company has considerable cash flow and earnings upside in a rising oil environment. The valuation is unreasonable, shares are about to be oversold, and are ripe for a rebound.

Source: Seeking Alpha

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