Risk/Reward Rating: Positive
Chesapeake Energy stock exited bankruptcy in February of 2021. The primary risk in the energy sector has been excessive debt levels combined with weak energy prices. New Chesapeake shareholders will find that each of these risks are in the rearview mirror.
The bankruptcy process has placed Chesapeake’s balance sheet as one of the least risky and strongest in the industry. Debt levels have been wiped out and the company now has net debt of only 0.6x EBITDAX (earnings before Interest, taxes, depreciation (or depletion), amortization, and exploration expense).
The company is projecting free cash flow generation of $3 billion over the next five years.
Continue reading this report with a stoxdox membership.