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Chesapeake (CHK) Receives Long-Term Credit Upgrade From Fitch

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Chesapeake Energy Corporation (CHK - Free Report) recently received a credit upgrade with positive outlook from Fitch Ratings. Fitch raised CHK’s long-term credit rating from BB to BB+, the highest “junk” rating, with a “positive” outlook. The next rating action is likely to raise the company to investment grade.

A second upgrade would take Chesapeake's longer-term issuer default rating to BBB-, the lowest investment-grade rating.

According to Fitch, CHK’s rating reflects the company’s strong footprint in the prolific gas resources like Marcellus and Haynesville. The credit rating agency also assessed Chesapeake’s increasing gas weighting, which normally results in lower netbacks than exploration and production companies with a higher oil weighting.

While Moody's rates Chesapeake at Ba2, two notches below investment grade, with a "positive" outlook, S&P Global Ratings rates the company’s credit at BB, also two notches below investment grade, with a "stable" outlook.

Zacks Rank & Key Picks

Chesapeake currently carries a Zack Rank #5 (Strong Sell).

Some better-ranked stocks for investors interested in the energy sector are CVR Energy (CVI - Free Report) , Par Pacific Holdings Inc. (PARR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) and Valero Energy Corporation (VLO - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CVR Energy, a diversified holding company with its main office in Sugar Land, TX, is an independent refiner and marketer of high value transportation fuels. Over the past seven days, CVI has seen an upward revision in earnings estimates for 2023.

Par Pacific, a growth-oriented company, combines knowledge of corporate financing with experience in the oil and gas sector. With 94,000 barrels per day of active refining capacity and a logistical system that includes an SPM, storage, barges, pipelines and trucking operations, PARR owns and manages one of Hawaii's biggest energy networks. Over the past 30 days, the company has witnessed an upward revision in earnings estimates for 2023 and 2024.

Valero Energy is a global manufacturer and marketer of transportation fuels and petrochemical products. With 15 refineries spread across Canada, the United States and the United Kingdom, VLO has a daily refining capacity of 3.1 million barrels. Over the past seven days, the company has seen an upward revision in earnings estimates for 2023 and 2024.

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