Chesapeake Energy Corporation (NYSE:CHK) presents a viable investment opportunity for the investors who are ready to take some risks. Over the past few years the Oklahoma-based oil and gas company has made significant changes to its capital structure. In 2015, Chesapeake’s revenue fell to $12.8 billion and net income plummeted to a loss of $14.6 billion. This was mainly due to the bearish oil market. But in 2016, the company started to rebound. Chesapeake Energy Corporation (NYSE:CHK) generated revenue of $7.9 billion in the period, while its loss decreased to $4.4 billion.
The Street expects the company to earn $0.75 per share. If the oil prices start to recover, analysts are hopeful that Chesapeake will earn as much as $1.16 per share in 2018. Chesapeake Energy Corporation (NYSE:CHK) has also revamped its operational dynamics, which have resulted in a significant decrease in production costs.
The company is operating three dry gas and three oil plants across six major regions. It has 18 rigs and 11 frac crews. These numbers suggest that the company is achieving the top end of its guidance.
However, Chesapeake Energy Corporation (NYSE:CHK) investors are set to vote in the 2017 Annual meeting of shareholders on increasing the authorized common stock to 2 billion shares. The meeting is scheduled to take place on May, 19. Analysts think that this key event could extend the current stock move or break it.
Last month, investment firm Stifel’s analyst Karl Chalabala and Jane Trotsenko initiated the coverage of Chesapeake Energy Corporation (NYSE:CHK) with a ‘Buy’ rating.
The analysts think that the company is “well-positioned” to get big gains in the North American shale business after a slew of asset divestitures, debt repayments and midstream obligation renegotiations. They also think that there has been a company-wide “technology revolution” in Chesapeake Energy Corporation (NYSE:CHK) that foreshadows future productivity gains. The analysts think that the Street is “overlooking” these factors. They think that Chesapeake Energy Corporation (NYSE:CHK) stock is set to “Outperform” the market. Stifel has a $10 price target on the stock.