Market Overview

WildHorse's Decline 'Makes Little Sense,' SunTrust Says In Upgrade

WildHorse's Decline 'Makes Little Sense,' SunTrust Says In Upgrade

Wildhorse Resource Development Corp (NYSE: WRD), is a single-basin story and pure-play NE Eagle Ford company whose stock sold off Wednesday for no legitimate reason, according to SunTrust.

The Analyst

SunTrust Robinson Humphrey's Welles Fitzpatrick upgraded WildHorse Resource Development from Hold to Buy but with a price target lowered from $26 to $25.

The Thesis

Wildhorse Resource's 15-percent decline in reaction to its earnings report "makes little sense," Fitzpatrick said in a note.

Investors have shown some concern with capital expenditure coming in at $249 million versus the consensus estimate of $230 million. However, the $249 million figure is "not far off" the implied run-rate of the high end of management's guidance. The consensus estimate's full year 2018 of $861 million is already at the high-end of management's $765-$875 million guidance.

The analyst said management discussed oil pipes filling up, which is in reference to the Magellan and Eaglebine pipelines which are in fact getting full. However, the company can truck to Houston for $6 per barrel meant a "blow out for them is going to top out at a couple bucks."

The stock is trading at 4.3 times estimated 2019 EV/EBITDA, which is a discount to the Eagle Ford group average of 4.6 times. Even out of an " abundance of caution," the stock should be valued at $25 per share and is based on a net asset value of $42 per share minus $17 per share in liabilities.

Price Action

Shares of Wildhorse Resource Development were trading lower by 1.6 percent to $19.74 Thursday.

Related Links:

85 Biggest Movers From Yesterday

Benzinga's Top Upgrades, Downgrades For August 9, 2018

Latest Ratings for WRD

Nov 2018Wells FargoDowngradesOutperformMarket Perform
Nov 2018Raymond JamesDowngradesStrong BuyOutperform
Aug 2018SunTrust Robinson HumphreyUpgradesHoldBuy

View More Analyst Ratings for WRD
View the Latest Analyst Ratings


Related Articles (WRD)

View Comments and Join the Discussion!

Posted-In: Eagle Ford energy SunTrust Robinson Humphrey Welles FitzpatrickAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

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.
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