KeyBanc Starts U.S. Silica Holdings (SLCA) at Buy

KeyBanc initiated coverage on U.S. Silica Holdings (NYSE: SLCA) with a Buy rating and a price target of $80.00.

Analyst Robin Shoemaker said, "Now we are seeing a fourth accelerator in demand for frac sand that should sustain the trend. E&P companies have found that in multiple basins, well productivity and EUR (expected ultimate recovery) are boosted by pumping larger volumes of sand per frac stage. The average amount of sand pumped per frac stage is increasing at a remarkable rate—doubling in some cases—and the upper limits of sand consumption per stage are still being defined through field tests and experimentation. At the same time, the ramping of frac sand production by companies such as U.S. Silica, while impressive, has barely kept pace with demand growth. Meeting future demand will likely be an even greater challenge (and opportunity). We believe that the barriers to entry in sand mining, processing and delivery are getting higher. Long-established companies like SLCA have huge advantages in terms of access to the highest-quality sand reserves and to the major rail transportation arteries that deliver the processed sand to customers."

For an analyst ratings summary and ratings history on U.S. Silica Holdings click here. For more ratings news on U.S. Silica Holdings click here.

Shares of U.S. Silica Holdings closed at $66.51 yesterday.

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