Deutsche Bank Upgrades RSP Permian, Inc. (RSPP) to Buy

Deutsche Bank upgraded RSP Permian, Inc. (NYSE: RSPP) from Hold to Buy with a price target of $33.00 (from $30.00). Analyst Josh Silverstein thinks RPS has the best combination of core acreage in the Permian Basin.

"While we have been a fan of RSPP’s acreage position, balance sheet, and execution over the past year, we remained on the sidelines largely due to valuation and limited upside to NAV. However, with further delineation of RSPP’s Spraberry and Upper Wolfcamp, production beating expectations, and the stock trading at a discount (albeit small) to peers, we are moving to BUY
from HOLD," said Silverstein.

"In our view, RSPP offers the best combination of core acreage, debt adjusted growth and margins amongst the smid-cap Permian focused producers and has executed the multi-year growth plan with minimal leverage ($400MM equity issued, a 20% borrowing base increase, and S&P upgrade all in 2H15). We also like RSPP’s leverage to an improving crude outlook as they remain mostly unhedged in 2016, providing strong margin expansion benefits that have been a cornerstone focus of management. Key to the 2016 outlook is further delineation of the 2014/15 acreage acquisitions and focusing further cost savings that can support margins," added the analyst.

For an analyst ratings summary and ratings history on RSP Permian, Inc. click here. For more ratings news on RSP Permian, Inc. click here.

Shares of RSP Permian, Inc. closed at $28.02 yesterday.

You May Also Be Interested In

• Citi Upgrades United Microelectronics Corp (2303:TT) (UMC) to Buy 'with limited downside'
• BofA Securities Starts GE Vernova (GEV) at Neutral, 'Multiyear turnaround amid positive demand backdrop'
• Compass Minerals International (CMP) PT Lowered to $15 at Deutsche Bank