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SMALL BUSINESS
Chesapeake shares fall as analyst cuts rating
AP
NEW YORK -Shares of Chesapeake Energy fell on Thursday, as an analyst downgraded the natural gas company, saying its stock has appreciated to a fair level, having rallied 53 percent in the past six months.
Chesapeake shares fell 90 cents, or 3.1 percent, to $27.93 in afternoon trading.
UBS analyst William Featherston cut his rating for the company to "Neutral" from "Buy."
He said the company has outperformed its peers, driven by its strong shale-asset portfolio in the U.S., loosened credit markets, its ability to deliver on asset divestitures, and as investors bought up shares seeking gains from an expected recovery in natural gas prices.
Despite rebounding crude oil prices and signs of an economic recovery, natural gas prices have remained at record lows as domestic natural gas storage levels have swelled and as the recession sapped demand for electricity and heat.
Featherston said one significant risk to his downgrade would be a surprise surge in oil and gas prices, as this would extend a rally among exploration and production companies like Chesapeake.
He lowered his price target to $31 from $32.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2009-10-22 15:42:34
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