Rice Energy (RICE) – Investment Analysts’ Recent Ratings Changes
A number of research firms have changed their ratings and price targets for Rice Energy (NYSE: RICE):
- 10/5/2016 – Rice Energy is now covered by analysts at Mizuho. They set a “buy” rating and a $43.00 price target on the stock.
- 10/3/2016 – Rice Energy had its “buy” rating reaffirmed by analysts at RBC Capital Markets. They now have a $30.00 price target on the stock, up previously from $29.00.
- 10/3/2016 – Rice Energy had its price target raised by analysts at Royal Bank Of Canada from $29.00 to $30.00. They now have an “outperform” rating on the stock.
- 10/3/2016 – Rice Energy had its price target raised by analysts at KLR Group from $37.00 to $41.00. They now have a “buy” rating on the stock.
- 9/28/2016 – Rice Energy is now covered by analysts at GMP Securities. They set a “buy” rating and a $34.00 price target on the stock.
- 9/28/2016 – Rice Energy had its “hold” rating reaffirmed by analysts at Johnson Rice.
- 9/28/2016 – Rice Energy had its price target raised by analysts at National Securities from $29.00 to $30.00. They now have a “buy” rating on the stock. They wrote, “Rice adds to its acreage position in the Marcellus, through its acquisition of Vantage Energy. In doing so, Rice added 85,000 net acres (55% increase), along with 399 million cubic feet equivalent per day (Mmcfe/d) of production to a current base of 758 Mmcfe/d. Additionally, Rice will be assuming $700 million in Vantage Energy debt. We expect the transaction to close in 4Q16, with subsequent increases in production to be realized in 2017. The transaction will be financed in part by Rice’s 40 million share issuance (approximately a 30% increase to share count), and cash on hand. We note a 7% decline in the stock price following the announcement, which we see as an overdone kneejerk reaction. Given our expectations for subsequent increases in production and EBITDA, we would encourage investors to add to their positions in Rice, particularly at current levels. We also note that the acquisition brings with it an additional 462 net well locations, offering internal rates of return (IRR) estimates of 110%.
In our opinion, Rice’s acquisition purchase price seems more than reasonable. If viewed purely on the basis of acreage, we calculate a transaction price of $31,765 per acre. However, when taking the acquired production into account, we estimate a per acre cost is closer to $1,200 (valuing production at $6,500 per flowing Mcfe). Given precedent transactions within the Marcellus, we contend that Rice received good value for its purchase price, and expect it to be accretive to future earnings.
We reiterate our BUY rating, while increasing our price target to $30. We see the downtick in price following the announcement, as an opportunity for investors to either establish new long positions in Rice, or add to current ones. We value Rice on the basis of daily production, proved reserves, and projected EBITDA (exhibit 2). Moreover, we increase our production mark to incorporate the new acquisition. In doing so, we arrive at a price of $30 per share, implying 20% additional upside, given current prices.
- 9/27/2016 – Rice Energy was downgraded by analysts at Goldman Sachs Group Inc. from a “neutral” rating to a “not rated” rating.
- 9/27/2016 – Rice Energy had its “buy” rating reaffirmed by analysts at Jefferies Group. They now have a $31.00 price target on the stock.
- 9/9/2016 – Rice Energy had its “buy” rating reaffirmed by analysts at Jefferies Group.
- 8/30/2016 – Rice Energy was downgraded by analysts at Seaport Global Securities from a “buy” rating to a “neutral” rating. They now have a $29.00 price target on the stock, up previously from $26.00.
- 8/29/2016 – Rice Energy is now covered by analysts at Williams Capital. They set a “hold” rating and a $29.00 price target on the stock.
- 8/11/2016 – Rice Energy had its price target raised by analysts at Citigroup Inc. from $22.00 to $28.00. They now have a “neutral” rating on the stock.
Shares of Rice Energy Inc. (NYSE:RICE) traded down 0.07% during midday trading on Monday, hitting $27.36. 4,199,436 shares of the stock traded hands. The company’s 50 day moving average price is $26.73 and its 200-day moving average price is $21.50. Rice Energy Inc. has a 12-month low of $7.92 and a 12-month high of $29.36. The stock’s market cap is $4.28 billion.
Rice Energy (NYSE:RICE) last posted its earnings results on Wednesday, August 3rd. The company reported ($1.07) earnings per share for the quarter, missing the consensus estimate of ($0.06) by $1.01. The firm had revenue of $116 million for the quarter, compared to analysts’ expectations of $180.12 million. Rice Energy had a negative net margin of 70.19% and a positive return on equity of 1.01%. Rice Energy’s revenue for the quarter was up 2.7% compared to the same quarter last year. During the same period last year, the firm earned $0.03 earnings per share. On average, equities research analysts expect that Rice Energy Inc. will post $0.04 EPS for the current year.
Rice Energy Inc (Rice Energy) is an independent natural gas and oil company. The Company is engaged in the acquisition, exploration and development of natural gas, oil and natural gas liquids (NGL) properties in the Appalachian Basin. The Company conducts its operations through two segments: Exploration and Production, and Midstream.
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