UPDATE: Credit Suisse Reiterates On Southwestern Energy Company Following Marcellus/Utica Deal

In a report published Thursday, Credit Suisse analyst Arun Jayaram reiterated an Underperform rating on Southwestern Energy Company (NYSE: SWN), but lowered the price target from $41.00 to $36.00.

In the report, Credit Suisse noted, “Mixed emotions. While we applaud SWN management for making a bold acquisition that plays to the company's core strength (i.e., efficient development of unconventional U.S. resources by harnessing their technical and midstream prowess), we believe it comes at too high of a purchase price as the transaction looks meaningfully dilutive to our NAV and cash flow forecasts. Given rapidly deteriorating natural gas fundamentals, we believe SWN shares are poised to lag its peers, particularly with an equity overhang looming. Lowering target price to $36 from $41 to reflect dilution from the CHK acquisition.”

Southwestern Energy Company closed on Wednesday at $32.54.