Cowen Raises Price Target on U.S. Silica (SLCA) to $52 Following SandBox Review
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Cowen reiterated an Outperform rating on U.S. Silica Holdings (NYSE: SLCA), and raised the price target to $52.00 (from $42.00), following a comprehensive review of the company's new SandBox acquisition. Cowen views SandBox's true competitive advantage is to be a first mover. In order to exploit this advantage SLCA will need to aggressively invest and grow market share from 10% in today's ~30MM ton market to 20% of 2018's estimated 70MM ton market.
Analyst Marc Bianchi commented, "SandBox may afford SLCA a unique competitive advantage as frac sand volume surpasses the 2014 peak. While our estimates and target move higher, significant near term capex requirements and recent share price strength leave us waiting for more clarity on margin upside, or a pullback in the stock to get more aggressive."
Shares of U.S. Silica Holdings closed at $49.00 yesterday.
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