Piper Jaffray Upgrades FMSA Holdings (FMSA) to Overweight

Piper Jaffray upgraded FMSA Holdings (NYSE: FMSA) from Neutral to Overweight with a price target of $8.00 (from $9.75).

Analyst John Daniel commented, "FMSA has announced an equity offering of 25M shares with a 3.75M shoe. We have long believed that an offering was needed, given the company's debt load (~$1.15B as of 4/28). Proceeds from the offering (~$148.75M) will be used for corporate purposes, including debt repayments. Our chief concern with FMSA has been its balance sheet as leverage is high (Net Debt/Cap = ~107%). As a result of this offering, which serves as a helpful deleveraging event (although much more debt reduction is needed), and our positive outlook on the frac sand market (as expressed in numerous previous epistles), we are upgrading FMSA to Overweight. Upside for the stock remains attractive, in our view, even with reduced estimates, reflecting dilution from the offering as well as rolling through FMSA's Q2 earnings warning. Our new $8 PT offers ~30% upside. We would look to be buyers, particularly if the stock comes under pressure Thursday."

For an analyst ratings summary and ratings history on FMSA Holdings click here. For more ratings news on FMSA Holdings click here.

Shares of FMSA Holdings closed at $6.15 yesterday.

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