UPDATE: Goldman Sachs Initiates Buy, $24 Target on Enduro Royalty
Goldman Sachs initiates its coverage on Enduro Royalty Trust (NYSE: NDRO) with a Buy rating and a target price of $24 per share as the company has leverage on bullish oil and yield is at a discount on current valuation.
Goldman says, “. We see three key reasons to buy NDRO: (1) leverage to our bullish oil price view via low-risk Permian acreage, (2) resource upside, and (3) a yield-oriented, investor-friendly financial structure, at a discounted valuation. We believe NDRO's underperformance since its IPO presents a notable opportunity, both on an absolute and a relative basis. We expect Enduro will generate over $2.00/unit in distributions in 2012-2013, implying an 11%-12% annual yield on a flat unit price, with significant relative valuation upside.”
NDRO closed at $18.95 per share on Monday.
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