UPDATE: Oppenheimer Initiates Coverage on Approach Resources
According to a research report published earlier today, Oppenheimer has initiated Approach Resources (NASDAQ: AREX) with an Outperform rating and a $44 PT.
Oppenheimer commented in the report, “Our price target is based on 8.2x 2013E cash flow of $5.37/share, above the peer group average, but in line with its historical average multiple. AREX was an early mover into the Permian Basin, which has become a focal point for the industry over the past year due to its high oil content and "stacked" payzones. We anticipate multiple upcoming catalysts to result in the shares outperforming over the next 12 months; these catalysts include results from a re-frac on its first horizontal "C" bench, an increase in EUR estimates, and pilot horizontal testing from the "A" bench this year.”
Approach Resources closed yesterday at $38.39.
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