Wells Fargo downgrading Southwestern Energy (NYSE:SWN) to Underweight from Equal Weight and Antero Resources (NYSE:AR) to Equal Weight from Overweight
To reflect the bank’s downwardly revised natural gas price outlook to an average $2.50/Mcf for 2023 and $2.91/Mcf for 2024.
While Southwestern Energy (SWN) is well positioned in global LNG trade in 2025 and beyond, Read said he sees continued headwinds due to its lack of capital returns and weak free cash flow generation in a weak natural gas environment.
The analyst largely cited Antero Resources’ (AR) largely unhedged production profile for the company’s likely below-average free cash flow generation in FY 2023.
Read maintained an Overweight rating and $39 price target for EQT Corp. (EQT) and Equal Weight ratings for Chesapeake Energy (CHK) and Coterra Energy (CTRA).
Antero Resources’ (AR) cash performance will be significantly impaired by collapsing natural gas pricing, but a negative cash flow scenario looks unlikely, Patient Tech Investor writes in an analysis published recently on Seeking Alpha.