Wunderlich Initiates Coverage On Earthstone Energy

Analysts at Wunderlich initiated coverage of Earthstone Energy Inc ESTE with a Buy rating and a $24.00 price target. Earthstone Energy is a North American oil and gas exploration company that operates primarily in North Dakota, Montana and Texas.

Big Upside Potential

Earthstone Energy stock was up 1.7 percent recently at $19.40. Wunderlich’s $24 price target represents more than a 25 percet upside for the stock from current levels. Earthstone stock has had a decent year in 2014, up about almost 5 percent year-to-date.

Other Analyst Action

Earlier this month, Global Hunter Securities initiated coverage of the company by issuing an Accumulate rating and setting a $19.00 target. Imperial Capital issued an Outperform rating on Earthstone this month, but cut their price target from $35.00 to $24.00. Northland Securities also initiated coverage of the company in early December by issuing an Outperform rating and setting a $30.00 target.

A Valuation Perspective

Earthstone’s 8.1 price to earnings ratio (PE) is at a six-year low. The company’s forward PE is a modest 12.1, and its price-to-earnings-to-growth ratio (PEG) is 0.3. The debt-to-equity ratio of 0.26 is also reasonable for an oil and gas exploration company such as Earthstone.