UPDATE: Stifel Initiates Coverage on Jones Energy Ahead of Anticipated Strong Growth

In a report published Thursday, Stifel analyst Michael Scialla initiated coverage on

with a Buy rating and $20.00 price target. In the report, Stifel noted, “With an industry-leading cost structure in the Mid-Continent region, Jones Energy is poised to internally fund a highly profitable development drilling program that we believe should drive annual production growth of approximately 29% over the next two years. The bulk of this anticipated organic growth will come from a five-plus year drilling inventory in the Cleveland sand play, where the company's typical well costs 35% less than its top competitors and generates an IRR of 60%-plus. An underappreciated liquids prone Woodford shale asset should supplement growth, while emerging Marmaton and Tonkawa plays could add to the inventory.” Jones Energy closed on Wednesday at $15.05.