Wednesday, January 19, 2011

Range Resources (NYSE:RRC) Looks Range Bound at This Time

Citing NAV and their outlook for gas, Ticonderoga sees Range Resources (NYSE:RRC) struggling in the longer term.

Ticonderoga says, "Adjusting for today’s production and price announcement, we forecast a slight increase in our 4Q10 earnings estimate from $0.18/share to $0.19/share. However, modeling a more rapidly improving price differential for gas in 2011, which is likely tied to growing Marcellus volumes, we are also increasing our full-year 2011 earnings estimates from $1.03 to $1.10/share. Consensus currently stands at: 4Q10- $0.13/share, FY 2011-$0.98/share.

"However, while we think the 2010 NAV growth for RRC will be relatively strong and the company’s shares could perform well around its year-end report, we maintain our longer-term Neutral rating as the valuation gap between RRC and its peers has dissipated, coupled with our bearish outlook for natural gas."

Ticonderoga reiterates a "Neutral" rating on Range Resources (RRC), which was trading at $47.60, down $0.39, or $0.81 percent, as of 1:25 PM EST.

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