Market Overview

My goal is to be on stage with my computer and let you
see my screen and make sure you know what buttons to
press, where you’re getting in & out, how to calculate
risk, your targets — all of those things.
It’s real-life trading. Make sure you sign up!
- Jerremy Newsome
GET TICKETS

Stifel Downgrades Emerge Energy Services: Here's Why

Share:
  • Emerge Energy Services LP (NYSE: EMES) shares are treading a downward path, declining 70 percent in the last three months.
  • Stifel’s Selman Akyol downgraded the rating on the company from Hold to Sell, while establishing a price target of $8.
  • Suspension of the company’s distribution guidance and continued headwinds make investment in Emerge Energy Services unattractive, Akyol said.

Emerge Energy Services has withdrawn its distribution guidance for 2015 due to difficult market conditions in its Sand and Fuel segments owing to pressure on oil and natural gas prices. Although the company can “work through this uncertain commodity environment, we expect further downward pressure in EMES units,” analyst Selman Akyol stated.

The EBITDA estimates for FY15 and FY16 have been reduced from $80.4 million to $72.8 million and from $81.4 million to $59.6 million, respectively. The distribution estimates for FY15 and FY16 have been reduced from $2.65 to $2.35 and from $2.57 to $1.74, respectively.

The partnership’s debt covenant restricts distribution payments if the company’s trailing twelve month debt-to-EBITDA ratio exceeds 3.5x, Akyol said. Although the ratio is expected to improve in 2016 and the partnership may receive covenant relief from the banks, “we cannot rule out the partnership suspending its distribution,” the Stifel report added.

A lower pricing environment and increased competition continue to impact the performance of oil field service participants. Akyol commented that these issues, along with the uncertain comments made by the management make investment in Emerge Energy Services unattractive.

Latest Ratings for EMES

DateFirmActionFromTo
Sep 2018MaintainsNeutralNeutral
Aug 2018MaintainsNeutralNeutral
May 2018DowngradesBuyNeutral

View More Analyst Ratings for EMES
View the Latest Analyst Ratings

Posted-In: Selman Akyol StifelAnalyst Color Downgrades Analyst Ratings

 

Related Articles (EMES)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
VTRUpgrades
AESUpgrades
BEUpgrades
SMPLInitiates Coverage On27.0
ACNMaintains211.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

SunOpta Announces Pricing of Public Offering, $100M Offering Of 16.670M Shares At $6/Share.

Wall Street Likes Virtual Reality Despite Absence Of A 'Killer App'