Dahlman Rose Maintains Buy Rating, $18 PT On MMR

Dahlman Rose is maintaining its Buy rating and $18 PT on McMoRan Exploration Company

, which it says “remains an interesting story, as our NAV is $20/sh.” “However, we estimate the company is trading at 16.2x our 2011 EBITDAX estimate of $235MM,” Dahlman Rose writes. “The multiple is at the high end of our comfort zone, but exploration results or positive tests from the Ultra Deep could render near-term multiple meaningless. “We have modeled none of this production in our 2011 estimates. Without Ultra Deep exploration, we think MMR's base business would likely trade at a 4-5x EBITDA multiple (or near proved reserve value) of $6/sh. The remaining $2Bn+ seems to be implied exploration upside.” McMoRan Exploration Company currently trades at $15.55.