Loading...
Loading...
JP Morgan initiates its coverage on Compressco Partners (
GSJK) with a Neutral rating and a price target of $18 per share as market challenges may offset solid organic growth prospects.
JP Morgan notes, "Compressco Partners (
GSJK) provides wellhead contract compression as well as other production enhancement services in the US and international markets. GSJK's
services are primarily applied to mature wells producing under low formation pressures. These services can offer a compelling value proposition through improving a well's production rates and recoverable reserves. However, given the weak natgas price environment, we believe producers are seeking to minimize costs wherever possible, thereby leading to lower utilization and reduced margins for service providers such as Compressco. Without visibility to higher natgas prices in the near term, we see a challenging market for contract compression services muting the positive impacts of a solid organic growth story."
GSJK closed at $$17.20 on Friday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in