investment bankers

investment bankers: Range Resources Corporation(RRC)

Advisors' Opinion:

• [By Ben Levisohn]

  Barclays analyst Thomas Driscoll and team explain why they cut Range Resources (RRC) to Underweight from Equal Weight:

  Les Stone/Reuters

  Range shares have performed very well this year despite severe financial challenges. While the company has a deep inventory of attractive drilling locations, it faces cost structure challenges and it has a levered balance sheet. We are lowering our price target 11% to $24 and downgrading our rating to Underweight.

  Cash flow before hedges – is negative at strip prices. Range is well hedged for 16, but we estimate 16 cash flow would be negative $(100) million at strip prices if we were to exclude greater than $400 mm of potential 16 hedge gains. Investors should be cautious when estimates include significant hedge gains.

  Ranges multiple may be pressured as growth slows. Range grew 20-25%/year over the past 3 years and the shares enjoy a 40-45% premium multiple. We forecast 2% growth this year and 8% next year, growth rates that benefit from our above strip gas forecast (we are using $2.50 vs. a strip average price of +/-$2.00) and ~$285 mm of hedge gains. Should the premium multiple disappear, the shares could fall nearly 50% to $17 per share. Our current price target assumes the company will continue to trade at a sharp premium as investors await a gas-price rebound.

  Shares of Range Resources have 4.1% to $29.91 at 11:54 a.m. today, leaving 20% of downside toDriscoll’s target price. The Energy Select Sector SPDR ETF (XLE) has dipped just 0.4% to $61.26.

• [By Ben Levisohn]

  The large cap E&Ps we cover raised ~ $6.5 billion of equity in 2015 and are likely to consider additional issuance in 2016. Pioneer Natural Resources (PXD) raised $1.3 billion on January 5th and Hess Corp. (HES) raised $1.5 billion of equity/equity-linked earlier this month. We think highly leveraged compan! ies such as Devon Energy,Encana andRange Resources (RRC) and companies with a large deficit (before asset sales), such asAnadarko Petroleum and Devon Energy, are most likely to consider raising equity. Additionally, we believe companies such as WPX Energy (WPX), Southwestern Energy (SWN), Marathon Oil, Continental Resources (CLR),Noble Energy and Newfield Exploration (NFX) could issue equity while several levered companies may be unwilling or unable to access equity markets. We do not think Apache, Canadian Natural Resource, EOG Resources (EOG), Occidental Petroleum orPioneer Natural Resources are likely to issue equity this year.

• [By WWW.THESTREET.COM]

  Range Resources (RRC) was upgraded to outperform at BMO. $44 price target The valuation is more attractive, as business fundamentals are improving, BMO said. 

• [By Dave Forest]

  Consider Range Resources (NYSE: RRC). The company now trades at an enterprise value of $15.5 billion. And yet the after-tax value of its reserves at year-end 2012 was just $3.2 billion.

• [By Wayne Duggan]

  Bernstein maintains Outperform ratings on the following oil stocks:

  Apache Corporation (NYSE: APA) Anadarko Petroleum Corporation (NYSE: APC) Cobalt International Energy, Inc. (NYSE: CIE) Cabot Oil & Gas Corporation (NYSE: COG) ConocoPhillips (NYSE: COP) Devon Energy Corp (NYSE: DVN) EOG Resources Inc (NYSE: EOG) Range Resources Corp. (NYSE: RRC) Southwestern Energy Company (NYSE: SWN)

  GMP analyst Bob Bakanauskas went long E&Ps back on February 3. He predicts that the oil market will transition from oversupply to undersupply in 2017. From that point forward, the world will once again require shale production growth.

source from Top Stocks For 2015:http://www.topstocksblog.com/investment-bankers.html