UPDATE: Guggenheim Securities Reiterates on CARBO Ceramics as Acceleration of Ceramic Demand and New Product Cycle Bode Well

In a report published Monday, Guggenheim Securities analyst Darren Gacicia reiterated a Buy rating on CARBO Ceramics CRR, and raised the price target from $115.00 to $145.00. In the report, Guggenheim Securities noted, “We are raising our PT to $145 from $115, which implies a 31.5x multiple on '14E EPS. A premium multiple discounts structural themes that create above industry growth, reflected in stronger ceramic proppant sales, potential market share gains from new technologies, and a more hopeful pricing outlook. We are adjusting our EPS for 4Q13/2013 to $0.84/$3.63 from $0.88/$3.15. The 3Q13 beat, guidance for higher ceramic proppant volumes, a margin boost from distribution infrastructure spending, and a favorable view on sales mix drive the increase in our 2013 estimate. The least well understood, but most important dynamic discussed was the application of new production technologies to existing proppant products. Effectively a new patented product cycle, the quality enhancement may differentiate CRR from more commodity offerings and improve market share.” CARBO Ceramics closed on Friday at $122.89.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsDarren GaciciaGuggenheim Securities
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