Canaccord Genuity Raises Price Target on RSP Permian (RSPP) Following Delaware Basin Acquisition
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Canaccord Genuity reiterated a Buy rating on RSP Permian, Inc. (NYSE: RSPP), and raised the price target to $50.00 (from $42.00), Following Delaware basin acquisition. The company now enters one of the best parts of the basin accretively while maintaining a relatively clean balance sheet and improving its debt-adjusted cash flow growth trajectory. Given the growth potential of the new asset, Canaccord now has RSPP with a 75% CAGR on cash flow per debt-adjusted share through 2018.
Analyst Sam Burwell commented, "We believe RSPP's acquisition bolsters the bull case going forward, despite paying what was on an acreage basis the highest price thus far in the Delaware. The company now enters one of the best parts of the basin accretively while maintaining a relatively clean balance sheet and improving its debt-adjusted cash flow growth trajectory. While we had anticipated very solid production growth from RSPP in 2017 and 2018, the Silver Hill acreage substantially bolsters the depth of high quality locations for the years beyond. Financing the deal primarily through equity, plus gaining significant existing production also helps insulate RSPP from downside risk."
Shares of RSP Permian, Inc. closed at $42.20 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Mergers and Acquisitions
Related EntitiesCanaccord Genuity, Definitive Agreement
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