KLR Sees Upside In Rosetta Following Sell Off
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.
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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
|May 2015||KeyBanc||Downgrades||Overweight||Sector Weight|
|May 2015||KLR Group||Upgrades||Reduce||Hold|
|May 2015||RBC Capital||Maintains||Outperform|
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