Boenning & Scattergood Upgrades Nuverra Environmental Solutions (NES) to Outperform

Boenning & Scattergood upgraded Nuverra Environmental Solutions (NYSE: NES) from Neutral to Outperform with a price target of $23.00.

Analyst Gerard Sweeney said, "We are upgrading Nuverra to Outperform as several positive variables line up driving revenue growth and profitability. The E&P industry should see better growth year over year, TFI sale will strengthen the balance sheet, several new high value services will drive profitability and finally the industry is consolidating as companies look for vendors with multiple services and high safety levels. Our target is $23 which is 8x our 2014 EV/EBITDA estimate of $123.3 mm. This is inline with the median valuation for NES over the past year."

"Nuverra has turned the corner from a financial perspective and is quickly moving towards operational firm footing. With the ABL loan facility of $245 mm NES was able to swap out bank debt and remove all debt covenants. The announced sale of TFI for $175 mm with further support the balance sheet leaving Nuverra with $400 mm of unsecured bonds and the aforementioned untapped asset backed loan of $245 mm. The transactions remove lingering covenant breach concerns and add capital to their balance sheet for higher return projects," he added.

For an analyst ratings summary and ratings history on Nuverra Environmental Solutions click here. For more ratings news on Nuverra Environmental Solutions click here.

Shares of Nuverra Environmental Solutions closed at $15.32 yesterday.

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