Sable Offshore retains over 180% upside despite Jefferies slashing its price target by more than half to $11.
Jefferies analyst Lloyd Byrne lowered Sable Offshore Corp. (NYSE:SOC) price target from $24 to $11 on July 6, citing recent challenges including equity dilution from a convertible notes offering. The new target still implies over 180% upside from current levels, prompting the firm to maintain its Buy rating on the stock.
The company recently raised capital through a public offering of 32.5 million common shares at $3.08 each and issued $300 million in 6.5% convertible senior notes due 2031. Underwriters have a 30-day option to purchase up to 4.9 million additional shares and $45 million in extra notes to cover excess demand. The notes carry a conversion rate of 249.7502 shares per $1,000 face value, equating to a conversion price of $4 per share, a 30% premium over the offering price.
Sable Offshore, an independent oil and gas exploration and production company, has faced hurdles securing government support, contributing to its recent financing efforts.