UPDATE: Goldman Sachs Downgrades Approach Resources to Neutral, Lowers PT on Worse Outlook for Growth/Returns

In a report published Friday, Goldman Sachs analyst Joseph B. Stewart downgraded the rating on

from Buy to Neutral, and lowered the price target from $34.00 to $30.00. In the report, Goldman Sachs noted, “We downgrade AREX to Neutral from Buy. AREX reported a largely in line 3Q13, but provided disappointing 2013/2014 guidance. Management lowered 2013 production guidance to 9.3 MBOE/d, -6% from the low end of the prev. guidance range (9.9-10.7 MBOE/d; GS: 9.8 MBOE/d) due to the timing of completions. Preliminary ‘14 production guidance of 40% growth, implying 13.0 MBOE/d, is well below our 14.4 MBOE/d est. Meanwhile, ‘13 capex increased to $300 mn from $260 mn and the initial 2014 E&D budget was pegged at $400 mn vs. our $330 mn est. on higher costs/more wells but with less productivity.” Approach Resources closed on Thursday at $27.78.