Memorial Resource Analyst Roundup: Buy!

Nine firms released new investment recommendations ranging from Strong Buy at Raymond James to Outperform at RBC Capital. The released price targets were all well above the current value. RBC Capital released the lowest at $28 and Barclays was highest at $33.

As the majority of these research notes were out before the open, shares of Memorial surged to $26.48 from a previous close of $25.36, a 4.4 percent increase. As the day progressed, the price stayed around $26, still up from the previous day’s close.

Related: Barclays Sees Production Growth Possibilities For Memorial Resources Development

A common point brought up in the notes was the large number of potential drilling locations in the Terryville Complex, specifically the Cotton Valley, where they currently have identified 1,146 gross drilling locations.

An analyst from Barclays noted that Memorial’s current horizontal wells there have returns averaging above 200 percent and an investment payback period of less than one year. There is a large potential for production growth in this region, say the majority of the analysts.

Over the past month, shares of Memorial have considerably outperformed the Energy Select Sector XLE. Currently up 16 percent on the energy index fund, analysts are expecting the growth to continue as Memorial explores new drilling locations and expands their operation.