Chesapeake Energy's stock falls toward first loss in 5 days

Shares of Chesapeake Energy Corp. slumped 1.1% in midday trade, putting them on track for the first loss in five sessions since the oil and gas company reported fourth-quarter earnings. Analyst John Gerdes at MKM Partners reiterated his neutral rating and $3 stock price target, which is 5.1% below current levels, saying the stock trades at an "almost 20% premium" to its peers. Gerdes said that while the completion of the WildHorse Resource Development Corp. acquisition last month adds "material high margin oil asset," Chesapeake's full-cycle return of about 90% remains meaningfully below the industry median cash recycle ratio of about 120%, as a consequence of a lower cash margin. The stock had run up 21% to close Monday at the highest level since Nov. 21, after the company reported before last Wednesday's open fourth-quarter earnings and revenue that beat expectations. The stock has gained 9.2% over the past three months, while the SPDR Energy Select Sector ETF has edged up 1.0% and the S&P 500 has advanced 3.3%.

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