Chesapeake Energy (CHK, $3.78) Shares Plummeted 23% in October - Why?
Chesapeake Energy Corporation (CHK) shares plunged by -23.4% in October, as per data provided by S&P Global Market Intelligence.
The sell-off was largely fueled by the surprising decision and the subsequent announcement by CHK to buy Wildhorse Resource Development (WRD, $22.80) for nearly $4 billion, for a combination of cash and stock.
As per the company, the deal is expected to help bolster its presence in the oil-rich Eagle Ford Shale along with the opportunity to double its production capacity by 2020. It is also expected to help accelerate the execution of CHK's deleveraging plan. CHK estimated that it will help ease its current debt load of around 4x debt to EBITDA down to 3.6x next year and 2.8x by 2020.
Sure, the acquisition of Wildhorse has the potential to transform CHK by speeding up its shift toward oil while improving its balance sheet. But what surprised the investor community was the high price paid by CHK, arguably spurring the sharp sell-off.
Investors also got nervous because of this deal’s eerie similarity to Range Resources' (RRC, $17.32) $4 billion acquisition of Memorial Resource Development in 2016. According to RRC at the time, the acquisition was anticipated to be a major boost to its strategic plan. But when the deal didn’t pan out as anticipated, it hurt RRC considerably.
The investor community is skeptical that a similar outcome could be in CHK's future, given that it is also an "overly" levered gas-focused company that's buying a private-equity-backed entity to improve its leverage profile and accelerate its strategic plan.
EXE in upward trend: 10-day moving average broke above 50-day moving average on September 24, 2025
The 10-day moving average for EXE crossed bullishly above the 50-day moving average on September 24, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 14 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 58 cases where EXE's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
EXE moved above its 50-day moving average on October 17, 2025 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where EXE advanced for three days, in of 294 cases, the price rose further within the following month. The odds of a continued upward trend are .
EXE may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 255 cases where EXE Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for EXE moved out of overbought territory on October 09, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 42 similar instances where the indicator moved out of overbought territory. In of the 42 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on October 10, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on EXE as a result. In of 88 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for EXE turned negative on October 10, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 55 similar instances when the indicator turned negative. In of the 55 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where EXE declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. EXE’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.419) is normal, around the industry mean (11.326). P/E Ratio (62.840) is within average values for comparable stocks, (23.051). Projected Growth (PEG Ratio) (1.604) is also within normal values, averaging (4.158). Dividend Yield (0.030) settles around the average of (0.072) among similar stocks. P/S Ratio (2.655) is also within normal values, averaging (129.734).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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General Information
a developer of oil and natural gas properties
Industry OilGasProduction
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