A report from Jeffries today has set a price target of $26 for Chesapeake Energy Corporation (NYSE:CHK) and offers reasons as to why the firm looks like it will perform well in the coming months. The report concentrates on the reinvention currently underway at the energy company. A buy rating is on the cards for the stock according to this report.

The analysts, Biju Z. Perchincherll and Yiktat Fung, take as a positive the reorganization of the firm at the top by the two largest shareholders, Carl Icahn and Mason Hawkins of Southeastern Asset Management. The moves at the top will replace 5 of the firm’s 9 directors. That should be enough to change the culture and direction of the leadership.

That reorganization is the first step on a course that contains a great deal of obstacles according to the analysts. Those challenges include the low price of natural gas and the huge debt that Chesapeake has been languishing under for much of its recent existence. The most important thing, according to the report, is that Chesapeake restore confience in its ability to deal with its own finances in order to satisfy investors.

Since the announcement of the reorganization yesterday Chesapeake’s stock has been trading higher. The firm is trading up almost 2% today at 16.84 at time of writing. That is good news for any who had been holding the stock long and were disheartened by the slide in the first months of 2012.

Chesapeake, despite the influence of Icahn, has a lot to prove to the market before it can return to its previous highs. The goings on at the company have left many feeling betrayed and everybody else skeptical of the future of the company.

The $20.5 billion in asset sales planned before the end of 2013 should restore confidence in the firm’s finances if the target is reached. More immediately the firm needs to raise $7 billion by the end of this year in order to stay in line with its loan covenants.

The authors of the report fear that Chesapeake will have to divest itself of some asstes that are part of its core business given the weak market for natural gas related assets.

Chesapeake faces problems. Nobody is arguing that. The firm’s stock price may have been dis proportionally hit by its financial dealings rather than worries about its business. Fixing its financial troubles could justify a price target of $26 and Chesapeake could be a value buy right now, Carl Icahn certainly thinks so.

After that it is unclear how Chesapeake will make the natural gas market work for them. Oil is at a low and that decelerates any conversion the firm could have hoped for. On top of that the firm needs cooperation from several different sectors to adjust natural gas demand into the main stream.

Chesapeake’s prospects, with Carl Icahn and Mason Hawkins guiding it, look good right now. The firm looks set to conquer its debt. Past that there’s no telling which way its business will go. Chesapeake looks a great deal riskier long than it does in the short term.