UPDATE: Stifel Nicolaus Initiates Pacific Coast Oil at Hold on Fair Value Estimate
In a report published Monday, Stifel Nicolaus analyst Daniel Guffey initiated coverage on Pacific Coast Oil (NYSE: ROYT) with a Hold rating.
In the report, Stifel Nicolaus noted, “We believe it is most appropriate to value ROYT shares using an NPV and IRR approach. To arrive at our fair value estimate for ROYT, we have used a weighted average of variable discounted distribution models run at four price deck scenarios: (1) Stifel estimates, (2) Strip, (3) Upside scenario, and (4) Downside scenario. Assigning variable weights to the four scenarios, we arrive at a weighted average fair value and IRR of $17.80 and 7% for ROYT shares, assuming the units are purchased at the prevailing unit price held until the trust dissolves. This sensitivity analysis is the backbone of our thesis and leads us to the belief that the units are currently fairly valued.”
Pacific Coast Oil closed on Friday at $18.14.
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