NYSE:CHK

Stock Analysis Report

Executive Summary

Chesapeake Energy Corporation engages in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids (NGL) from underground reservoirs in the United States.


Snowflake Analysis

Undervalued with acceptable track record.


Similar Companies

Share Price & News

How has Chesapeake Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CHK's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.4%

CHK

-0.7%

US Oil and Gas

-1.1%

US Market


1 Year Return

-82.8%

CHK

-18.9%

US Oil and Gas

17.9%

US Market

Return vs Industry: CHK underperformed the US Oil and Gas industry which returned -18.9% over the past year.

Return vs Market: CHK underperformed the US Market which returned 18% over the past year.


Shareholder returns

CHKIndustryMarket
7 Day-0.4%-0.7%-1.1%
30 Day-19.7%-5.8%1.4%
90 Day-22.8%-7.6%6.9%
1 Year-82.8%-82.8%-15.7%-18.9%20.3%17.9%
3 Year-92.1%-92.1%-12.1%-20.4%47.8%38.3%
5 Year-97.3%-97.3%-21.3%-32.9%71.9%53.0%

Price Volatility Vs. Market

How volatile is Chesapeake Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Chesapeake Energy undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CHK ($0.45) is trading below our estimate of fair value ($0.93)

Significantly Below Fair Value: CHK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CHK is good value based on its PE Ratio (0.5x) compared to the Oil and Gas industry average (10x).

PE vs Market: CHK is good value based on its PE Ratio (0.5x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: CHK's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CHK is good value based on its PB Ratio (0.3x) compared to the US Oil and Gas industry average (0.8x).


Next Steps

Future Growth

How is Chesapeake Energy forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

-20.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHK's earnings are forecast to decline over the next 3 years (-20% per year).

Earnings vs Market: CHK's earnings are forecast to decline over the next 3 years (-20% per year).

High Growth Earnings: CHK's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CHK's revenue is expected to decline over the next 3 years (-6% per year).

High Growth Revenue: CHK's revenue is forecast to decline over the next 3 years (-6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CHK is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Chesapeake Energy performed over the past 5 years?

43.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHK has high quality earnings.

Growing Profit Margin: CHK became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: CHK has become profitable over the past 5 years, growing earnings by 43.9% per year.

Accelerating Growth: CHK has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CHK has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-13.3%).


Return on Equity

High ROE: Whilst CHK's Return on Equity (26.82%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Chesapeake Energy's financial position?


Financial Position Analysis

Short Term Liabilities: CHK's short term assets ($1.4B) do not cover its short term liabilities ($2.3B).

Long Term Liabilities: CHK's short term assets ($1.4B) do not cover its long term liabilities ($9.5B).


Debt to Equity History and Analysis

Debt Level: CHK's debt to equity ratio (197.3%) is considered high.

Reducing Debt: CHK's debt to equity ratio has increased from 65.5% to 197.3% over the past 5 years.


Balance Sheet

Inventory Level: CHK has a high level of physical assets or inventory.

Debt Coverage by Assets: CHK's debt is not covered by short term assets (assets are 0.2x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: CHK is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: CHK is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Chesapeake Energy's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%1.4%markettop25%3.7%industryaverage4.6%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate CHK's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate CHK's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CHK's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CHK's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: CHK is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CHK's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.1yrs

Average management tenure


CEO

Doug Lawler (52yo)

6.7yrs

Tenure

US$22,745,427

Compensation

Mr. Robert Douglas Lawler, also known as Doug, has been the Chief Executive Officer and President of Chesapeake Energy Corporation, the Sole Manager of Chesapeake Operating, L.L.C, Sole Manager of Chesapea ...


CEO Compensation Analysis

Compensation vs Market: Doug's total compensation ($USD22.75M) is above average for companies of similar size in the US market ($USD2.50M).

Compensation vs Earnings: Doug's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Robert Lawler
President6.7yrsUS$22.75m0.28% $2.5m
Domenic Dell'Osso
Executive VP & CFO9.3yrsUS$7.54m0.11% $987.6k
James Webb
Executive VP7.3yrsUS$6.43m0.083% $717.1k
Frank Patterson
Executive Vice President of Exploration & Production3.5yrsUS$6.77m0.069% $599.9k
William Buergler
Senior VP & Chief Accounting Officer2.5yrsno data0.029% $255.2k
Bradley Sylvester
Vice President of Investor Relations & Communications5.5yrsno datano data
James Hawkins
Vice President of Human Resources0yrsno datano data

6.1yrs

Average Tenure

51.5yo

Average Age

Experienced Management: CHK's management team is seasoned and experienced (6.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Robert Lawler
President6.7yrsUS$22.75m0.28% $2.5m
Merrill Miller
Independent Director13.1yrsUS$365.00k0.025% $219.1k
Luke Corbett
Independent Director3.2yrsUS$350.00k0.011% $94.4k
Thomas Ryan
Independent Director7.1yrsUS$375.00k0.059% $509.6k
R. Martin
Non-Executive Chairman4.3yrsUS$630.00k0.067% $581.4k
Leslie Keating
Independent Director2.4yrsUS$350.00k0.014% $120.0k
Gloria Boyland
Independent Director3.3yrsUS$350.00k0.012% $106.3k
Mark Edmunds
Independent Director1.5yrsUS$131.07k0.0065% $56.3k

3.8yrs

Average Tenure

60yo

Average Age

Experienced Board: CHK's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CHK insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 54.9%.


Top Shareholders

Company Information

Chesapeake Energy Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Chesapeake Energy Corporation
  • Ticker: CHK
  • Exchange: NYSE
  • Founded: 1989
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: US$868.220m
  • Shares outstanding: 1.94b
  • Website: https://www.chk.com

Number of Employees


Location

  • Chesapeake Energy Corporation
  • 6100 North Western Avenue
  • Oklahoma City
  • Oklahoma
  • 73118
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CHKNYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 1993
CS1DB (Deutsche Boerse AG)YesCommon StockDEEURFeb 1993
CS1XTRA (XETRA Trading Platform)YesCommon StockDEEURFeb 1993
CHK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNFeb 1993
0HWLLSE (London Stock Exchange)YesCommon StockGBUSDFeb 1993
CHKD.HOTCUS (Other "Grey Market" OTC)PFD CONV 144AUSUSDNov 2005
CHK.PRDNYSE (New York Stock Exchange)PFD CONVUSUSDNov 2005
CHKD.GOTCPK (Pink Sheets LLC)5% CM CNV PFDUSUSDApr 2006
CHKW.ZOTCUS (Other "Grey Market" OTC)PFD CONV 5.75%USUSDJun 2011
CHKD.POTCPK (Pink Sheets LLC)PFD 5.75USUSDJul 2011
CHKV.ZOTCUS (Other "Grey Market" OTC)PFD CV-AUSUSDApr 2012
CHKE34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REPR 1 COM SHS USD0.01BRBRLAug 2016

Biography

Chesapeake Energy Corporation engages in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids (NGL) from underground reservoirs in the United States. The company holds interests in natural gas resource plays, including the Marcellus in Northern Appalachian Basin in Pennsylvania; Haynesville located in Northwestern Louisiana; Eagle Ford in South Texas; Brazos Valley in Southeast Texas; Powder River Basin in Wyoming; and Mid-Continent in Anadarko Basin of northwestern Oklahoma. As of December 31, 2018, it owned interests in approximately 13,200 oil and natural gas wells; and had estimated proved reserves of 1,448 one million barrels of oil equivalent. Chesapeake Energy Corporation was founded in 1989 and is headquartered in Oklahoma City, Oklahoma. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 00:30
End of Day Share Price2020/02/21 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.