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KLR Sees Upside In Rosetta Following Sell Off

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KLR Group Upgrades Rosetta Resources To Accumulate
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Rosetta Resources (NASDAQ: ROSE) may see a boost after KLR upgraded the stock from Hold to Accumulate and announced $59 price target (20.9 percent upside). The stock was upgraded on valuation.

The company has significant upside potential in the Eagle Ford and Delaware Basin sites, according to analyst John Gerdes. He sees these two locations driving 30 percent growth in 2015.

Gerdes continues that an Upper Eagle Ford pilot test has been successful, exhibiting similar performance as Lower Eagle Ford.

Related Link: Credit Suisse: U.S. Steel Industry Is Changing

In terms of the Delaware basin, only four to five rigs are currently in place and Rosetta plans to add 20 more in 2014.

The $59 price target was derived with an NPV of free cash flow and 15 percent discount rate. KLR Writes that a discount rate higher than the broader equity market is justified because of volatile investment involved in the energy space and and Rosetta’s market cap.

Shares of Rosetta Resources were last trading at $48.51, down 0.59 percent.

Latest Ratings for ROSE

DateFirmActionFromTo
Aug 2014KLR GroupUpgradesHoldAccumulate
Aug 2014CitigroupMaintainsBuy
Apr 2014KLR GroupDowngradesAccumulateHold

View More Analyst Ratings for ROSE
View the Latest Analyst Ratings

Posted-In: John Gerdes KLRUpgrades Analyst Ratings

 

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