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Canaccord Genuity Maintains a 'Hold' on RPC Inc. (RES); Still Pricing in Some Acquisition Potential

October 11, 2011 8:39 AM EDT
Get Alerts RES Hot Sheet
Price: $7.74 +0.65%

Rating Summary:
    6 Buy, 16 Hold, 11 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Canaccord Genuity maintains a 'Hold' on RPC Inc. (NYSE: RES) price target of $24.00.

Canaccord analyst, Scott Burk, said, "RPC didn’t get much uplift after the CPX buyout, despite being a prime pressure pumping acquisition candidate, partly because the stock is already pricing in some likelihood of being acquired."

"Our target price of $24/share is based on 4.0x 2012 EBITDA, essentially in line with the company’s trough level valuations. RES is one of the cheapest stocks in the group based on EBITDA valuations, and it has 34% upside to our price target (less than Basic (NYSE: BAS) and Key Energy (NYSE: KEG), but more than Halliburton (NYSE: HAL) or Weatherford (NYSE: WFT)). It is also the only mid-cap name in the group to offer a dividend yield (1.8%). RES outperformed its peers in early August after media reports about the company seeking a buyout, and it has still outperformed by ~15% since mid-July. Un-pricing the buyout likelihood would make RES a more attractive stock buy in our mind."

For more ratings news on RPC Inc. click here and for the rating history of RPC Inc. click here.

Shares of RPC Inc. closed at $17.85 yesterday.


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