UPDATE: Topeka Capital Markets Initiates Coverage on Rosetta Resources with Buy Rating, $64 PT on Premier Position

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In a report published Wednesday, Topeka Capital Markets analyst Gabriele Sorbara initiated coverage on Rosetta Resources
ROSE
with a Buy rating and $64.00 price target. In the report, Sorbara noted, “We are initiating coverage of Rosetta Resources (ROSE) with a Buy rating and price target of $64.00 per share. ROSE is our top pick, given its premier position in the Eagle Ford shale play and its new foothold in the Wolfbone play. The recent foray into the Permian Basin provides the Company with approximately 800 net Wolfbone locations on 40-acre spacing (with potential for 20-acre spacing), relieving previous concerns regarding its inventory in the Eagle Ford. However, new concerns of equity risk and lower IRRs in the Wolfbone (vs. the Eagle Ford) have emerged, providing a buying opportunity in our opinion, as we have a high degree of confidence that ROSE can increase EURs, while driving down costs in the play. Further, should the Company elect to tap the equity markets; we believe it would be done in conjunction with an accretive event/announcement.” Rosetta Resources closed on Tuesday at $47.25.
Posted In: Analyst ColorInitiationAnalyst RatingsTopeka Capital Markets
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