UPDATE: Howard Weil Starts Eclipse Resources (ECR) at Outperform

Howard Weil initiated coverage on Eclipse Resources (NYSE: ECR) with an Outperform rating and a price target of $30. Analyst Holly Stewart sees attractive risk/reward given conservative guidance.

"This pure Appalachian E&P has accumulated an enviable acreage position in what ultimately may be one of the most economic natural gas basins in the country. The shares however have had a rough start in their initial debut, down 11.5% vs. its pure Appalachian peers of -7% over the same period. Our Sector Outperform rating reflects our view that Eclipse Resources has accumulated a premier position in an emerging basin, and with a couple more operated wells under its belt, investors will begin to give the Company more valuation credit that is not currently reflected in the share price," said Stewart.

"ECR has the asset base to drive long-term value. With over 96k net acres in what is deemed the core of the Utica shale, the position competes well with major players across the basin. Execution will thus be the key driver over the near-term as the Company has yet to prove themselves as an operator. Additionally, the production forecast for vast growth leaves little room for error in a company of ECR’s size. The deeper the list of drilled and completed successful wells, the more credit the Company will receive in the market as an operator who executes," she added.

For an analyst ratings summary and ratings history on Eclipse Resources click here. For more ratings news on Eclipse Resources click here.

Shares of Eclipse Resources closed at $23.92 yesterday.

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