Shares of Sanchez Energy Corporation (NYSE:SN) gapped up before the market opened on Tuesday after National Securities raised their price target on the stock from $11.00 to $22.00. The stock had previously closed at $12.63, but opened at $11.24. National Securities currently has a buy rating on the stock. Sanchez Energy Corporation shares last traded at $13.27, with a volume of 10,673,019 shares.
The analysts wrote, “What Happened: • Sanchez Energy expands its footprint in the Eagle Ford Shale, acquiring 133,000 (77,500 net) acres, along with 67,000 barrels per day (33,500 net) of existing production from Anadarko Petroleum (NYSE: APC; NC) • The transaction ($2.3 million), in partnership with Blackstone Energy Partners, will be financed via cash on hand and a non-recourse unrestricted subsidiary. As such, Sanchez announced that the acquisition will be non-dilutive, and ultimately de-leveraging. • We expect the transaction to close in 1Q17, with incremental production being realized in 2Q17. • Consequently, we are adjusting our model to account for the expected increases in production, revenue, and EBITDA. Moreover, we are raising our price target to $22 from $11, and would encourage investors to initiate long positions at current prices. Our Take: • We see this as a significant and potentially transformative transaction for Sanchez, which also adds an additional 150 million net barrels of reserves to the company. Moreover, along with the 33,500 net barrels of incremental production, the acquisition brings with it 132 drilled but uncompleted (DUC) locations, providing the company with an additional avenue for production growth. • We look favorably on the cost of the acquisition. To that end, if viewing the transaction only through the lens of cost per flowing bbl (daily production), Sanchez acquired the asset for approximately $34,000 per flowing barrel (well within our comfort zone). Ultimately, the aforementioned inclusion of reserves and acreage only strengthens the company’s purchase, in our view. • Additionally, the timing of the transaction occurs as the outlook for oil prices has improved. Specifically, we note average 12 month strip pricing of $47.78 per barrel as of our 3Q16 earnings note. Since that time, average 12 month strip prices have increased 15% to $55.02 per bbl. “
Several other brokerages have also recently weighed in on SN. RBC Capital Markets reiterated an “outperform” rating and issued a $13.00 price objective (up previously from $11.00) on shares of Sanchez Energy Corporation in a research note on Tuesday. Royal Bank Of Canada lifted their price objective on shares of Sanchez Energy Corporation from $11.00 to $13.00 and gave the stock an “outperform” rating in a research note on Tuesday. KLR Group upgraded shares of Sanchez Energy Corporation from a “hold” rating to a “buy” rating in a research note on Friday, January 13th. Zacks Investment Research cut shares of Sanchez Energy Corporation from a “buy” rating to a “hold” rating in a research note on Wednesday, December 28th. Finally, Canaccord Genuity set a $11.00 price objective on shares of Sanchez Energy Corporation and gave the stock a “buy” rating in a research note on Thursday, January 12th. Ten analysts have rated the stock with a hold rating and nine have assigned a buy rating to the company’s stock. The company currently has a consensus rating of “Hold” and a consensus target price of $10.29.
In other Sanchez Energy Corporation news, Chairman Antonio R. Sanchez, Jr. sold 82,573 shares of the business’s stock in a transaction that occurred on Monday, January 9th. The shares were sold at an average price of $8.70, for a total transaction of $718,385.10. Following the sale, the chairman now directly owns 1,661,236 shares of the company’s stock, valued at approximately $14,452,753.20. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Antonio R. Sanchez III sold 52,216 shares of the business’s stock in a transaction that occurred on Monday, January 9th. The stock was sold at an average price of $8.70, for a total transaction of $454,279.20. Following the sale, the chief executive officer now directly owns 1,297,764 shares in the company, valued at $11,290,546.80. The disclosure for this sale can be found here. Corporate insiders own 15.32% of the company’s stock.
Large investors have recently bought and sold shares of the company. Stratos Wealth Partners LTD. raised its stake in Sanchez Energy Corporation by 1.0% in the third quarter. Stratos Wealth Partners LTD. now owns 34,414 shares of the company’s stock worth $304,000 after buying an additional 350 shares during the last quarter. Rhumbline Advisers raised its stake in Sanchez Energy Corporation by 0.9% in the third quarter. Rhumbline Advisers now owns 71,810 shares of the company’s stock worth $635,000 after buying an additional 650 shares during the last quarter. State Board of Administration of Florida Retirement System raised its stake in Sanchez Energy Corporation by 3.1% in the second quarter. State Board of Administration of Florida Retirement System now owns 35,830 shares of the company’s stock worth $253,000 after buying an additional 1,093 shares during the last quarter. California State Teachers Retirement System raised its stake in Sanchez Energy Corporation by 1.0% in the third quarter. California State Teachers Retirement System now owns 118,404 shares of the company’s stock worth $1,047,000 after buying an additional 1,200 shares during the last quarter. Finally, BlackRock Inc. raised its stake in Sanchez Energy Corporation by 17.8% in the third quarter. BlackRock Inc. now owns 15,456 shares of the company’s stock worth $136,000 after buying an additional 2,338 shares during the last quarter. 60.69% of the stock is currently owned by hedge funds and other institutional investors.
The stock’s market cap is $787.71 million. The stock has a 50-day moving average price of $9.31 and a 200 day moving average price of $7.99.
Sanchez Energy Corporation (NYSE:SN) last announced its quarterly earnings results on Monday, November 7th. The company reported ($1.19) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.03 by $1.22. The firm had revenue of $114.81 million for the quarter, compared to analysts’ expectations of $133.94 million. During the same quarter last year, the firm posted ($7.33) earnings per share. The company’s quarterly revenue was up .3% on a year-over-year basis. Analysts forecast that Sanchez Energy Corporation will post ($0.04) earnings per share for the current fiscal year.
Sanchez Energy Corporation Company Profile
Sanchez Energy Corporation is an independent exploration and production company. The Company is focused on the acquisition and development of unconventional oil and natural gas resources in the onshore United States Gulf Coast. The Company focuses on the Eagle Ford Shale in South Texas and the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana.