KLR Group Raises Price Target on Rice Energy (RICE) to $41 Following Recent Acquisition

October 3, 2016 8:17 AM EDT
Get Alerts RICE Hot Sheet
Price: $24.20 -4.12%

Rating Summary:
    22 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 14 | Down: 11 | New: 8
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KLR Group reiterated a Buy rating on Rice Energy (NYSE: RICE), and raised the price target to $41.00 (from $37.00), following the company's recent acquisition of Vantage Energy.

Analyst Gail Nicholson commented, "We are increasing our target price $4 to $41 per share following the recent acquisition of Vantage Energy and the increase in our drilling tempo forecast partly offset by the equity issuance. RICE is acquiring Vantage for ~$2.7 billion (includes assumption of debt) consisting of ~$1.72 billion cash and ~$980 million of equity issued to Vantage's sponsors. The company ascribed ~$2.1 billion of value to the E&P assets and ~$600 million to the midstream (~30 miles of dry gas gathering pipeline, ~7,100 horsepower of compression, ~313 MMcfpd of throughput in 1H/16 and should generate $40-$50 million of EBITDA in '17), which is being acquired by Rice Midstream Partners (RMP, $24.26, NR). To fund the cash portion of the acquisition, RICE priced 46 million shares (includes over allotment), at ~$25.50 for total gross proceeds of ~$1.17 billion, including the shares issued to Vantage RICE shares outstanding increased ~54%."

For an analyst ratings summary and ratings history on Rice Energy click here. For more ratings news on Rice Energy click here.

Shares of Rice Energy closed at $26.11 yesterday.

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