Chesapeake Energy Corp. (NYSE: CHK) had a strong Monday, and its shares opened higher again on Tuesday after a positive analyst report from Raymond James. The firm’s James Freeman has reiterated his Outperform rating and raised his target price to $4.50 from $4.00.

The move follows a crude oil rally that has gone to a 2019 high, after a poor performance in much of the fourth quarter of 2018. This new target for Chesapeake implies upside of over 40%.

Freeman does not yet see positive cash flows in 2019, with the report noting that the oil and gas player likely is going to “modestly outspend cash flow in 2019.” Still, Freeman does see Chesapeake as having a good chance of being roughly cash flow neutral in 2020 while the company continues to pay down its debt.

In a prior report this year, Freeman had praised Chesapeake for eliminating three of its rigs in the Haynesville shale play as a means to curb negative cash flows and for looking at further divestiture opportunities to be better focused.

Crude oil futures traded up 0.5% at $59.37 early Tuesday and were at the highest levels since mid-November.

Chesapeake shares closed up 6% at $3.15 on Monday, and the stock was open up more than 6% at $3.35 early Tuesday. Its 52-week range is $1.71 to $5.60, and the Refinitiv (Thomson Reuters) consensus target price was $3.09 ahead of this call.

Chesapeake shares already had risen 50% so far in 2019, versus year-to-date gains of about 13% for the S&P 500 and almost 30% for crude oil.

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