Goldman Sachs Upgrades Range Resources (RRC) to Conviction Buy
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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."
Shares of Range Resources closed at $34.51 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Hot Comments, Hot Upgrades, Upgrades
Related EntitiesGoldman Sachs Conviction Buy List, Goldman Sachs, Definitive Agreement
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