Mizuho Securities Starts Rice Energy (RICE) at Buy
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Mizuho Securities initiates coverage on Rice Energy (NYSE: RICE) with a Buy rating and a price target of $43.00.
Analyst Timothy Rezvan commented, "RICE shares appeared undervalued before September's Vantage acquisition, and still do now. Increasing core inventory, a growing queue of midstream drop-down candidates, and resurgent gas prices create a bullish setup. But the real embedded value we see in RICE shares is that of the GP of Rice's midstream subsidiary. We model $88 million of gross GP distributions in 2020, validating its $7/share value in our Street-high $43 PT. Pro forma for Vantage, RICE shares trade at 7.2x 2017E EV/EBITDA, despite strong earnings visibility from an attractively hedged gas production stream."
Shares of Rice Energy closed at $26.66 yesterday.
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