Chord Energy double downgraded to Underperform at BofA on oil price caution

As previously reported, BofA double downgraded Chord Energy to Underperform from Buy with a price target of $165, down from $177. The firm has taken a defensive stance towards oil in 2024 and sees some risk that it may be more challenging for Saudi Arabia to stabilize the commodity price due to the combination of uncertain demand and non-OPEC growth, the analyst tells investors. Given this context, the firm has lowered its long-term oil assumptions and notes that its prior Buy rating on Chord was predicated on a rate of change in its outlook from wider spacing and longer laterals that would provide greater confidence in its depth of inventory and ability to sustain free cash flow, but these positives are more than offset by its lower longer-term price deck.