Skip to main content

Market Overview

RPC's Risk-Reward Has Turned Unfavorable, According To Morgan Stanley

RPC's Risk-Reward Has Turned Unfavorable, According To Morgan Stanley

RPC, Inc. (NYSE: RES) was downgraded Tuesday by Morgan Stanley, with the research firm telling investors that better opportunities exist elsewhere. 

The Analyst

Morgan Stanley's Ole Slorer. Slorer downgraded RPC, Inc. from Equal-weight to Underweight and has a price target of $25 for the stock. (See Slorer's track record here.)

The Thesis

No new major positive catalysts are ahead for RPC, and the risk-reward is unfavorable, Slorer said. The oilfield supplier has reinstated its dividend and is building new equpment, while its valuation has nearly reached prior cyclical peaks, according to Morgan Stanley.   

RPC's valuation — normalized for expanded capacity — is only 10 percent below prior peaks, Slorer said. The stock trades with a 30 percent EV/EBITDA premium to its peers but has "a similar growth outlook," the analyst said. 

RPC, Inc. has only 25 percent upside to Morgan Stanley's bullish scenario and 50 percent downside potential. Peer companies have more favorable risk-reward, the analyst said. 

The Price Action

The stock is trading around 2.5 percent lower — the fourth consecutive trading session in the negative territory.

Related Links: 

Improving Oil Fundamentals Overshadowed By All The Attention On Bloated Inventories

David Einhorn's Letter To Greenlight Investors Reveals New Perrigo Position

Latest Ratings for RES

Nov 2020Morgan StanleyDowngradesEqual-WeightUnderweight
Aug 2020CitigroupMaintainsSell
Jul 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for RES
View the Latest Analyst Ratings


Related Articles (RES)

View Comments and Join the Discussion!

Posted-In: Inc. Morgan Stanley Ole Slorer RPCAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

FSRMorgan StanleyMaintains40.0
MEDDA DavidsonMaintains302.0
VICRBWS FinancialMaintains120.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
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