Goldman Sachs Upgrades Range Resources (RRC) to Conviction Buy

October 31, 2016 8:21 AM EDT
Get Alerts RRC Hot Sheet
Price: $34.14 --0%

Rating Summary:
    26 Buy, 17 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 13 | New: 10
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Goldman Sachs upgraded Range Resources (NYSE: RRC) from Neutral to Conviction Buy with a price target of $47, implying upside of 36%. Analyst Brian Singer highlighted gas/NGLs exposure, underappreciated production growth and valuation.

"Relative to other gassy E&Ps, RRC is more favorably exposed to Henry Hub and NGLs prices where we see near-term upside and less exposed to local Appalachia prices (of 2017 production, 34% unhedged exposure to Henry Hub/NGLs and only 19% unhedged exposure to Appalachia gas prices)," said Singer.

"RRC’s recent acquisition of Louisiana assets adds ability to flex production between Appalachia and Louisiana to mitigate risk of pipeline delays and/or regional price differences. We also see potential for greater Louisiana resource credit from upcoming delineation tests in a more exploratory portion of its acreage block with results expected by year-end," continued the analyst.

Singer added, "We see upside to consensus estimates and recently-released guidance for 2018 production growth (we are >20%). RRC’s EV/EBITDA multiple reflects below-historical premium, particularly on 2018E despite continued superior resource life."

For an analyst ratings summary and ratings history on Range Resources click here. For more ratings news on Range Resources click here.

Shares of Range Resources closed at $34.51 yesterday.

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