B.Riley FBR Gives a Buy Rating to Hi-Crush Partners

By Austin Angelo

In a report released today, Lucas Pipes from B.Riley FBR assigned a Buy rating to Hi-Crush Partners (NYSE: HCLP), with a price target of $16. The company’s shares opened today at $10.

Pipes said:

“Summary and Recommendation We are initiating coverage of Hi-Crush Partners LP (HCLP) with a Buy recommendation and a 12-month price target of $16 per share. We believe the master limited partnership is well positioned to grow distributions over the coming years due to high-return growth projects in both sand mining and logistics, complementing what we believe is already an attractive combination of low-cost mining and infrastructure assets. Hi-Crush recently resumed unit distributions supplemented by a $100 million unit repurchase program. We estimate that quarterly distributions will grow further by 36% in 2018 and 47% in 2019, not including the positive impact of the repurchase program on distributions. Even with the growing distributions, we estimate a conservative 2019 distribution coverage ratio of 1.9x.”

According to TipRanks.com, Pipes is a 3-star analyst with an average return of 3.5% and a 51.9% success rate. Pipes covers the Basic Materials sector, focusing on stocks such as Peabody Energy Corporation Comm, Newmont Mining Corporation, and Stillwater Mining Company.

Currently, the analyst consensus on Hi-Crush Partners is Strong Buy and the average price target is $14.15, representing a 41.5% upside.

In a report issued on December 4, Johnson Rice also upgraded the stock to Buy with a $15 price target.

Based on Hi-Crush Partners’ latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $168 million and quarterly net profit of $29.81 million. In comparison, last year the company earned revenue of $46.56 million and had a GAAP net loss of $11.7 million.

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Hi-Crush Partners LP engages in the production of monocrystalline sand. It owns, operates, and develops sand reserves and related excavation; as well as processing facilities. The company produces a wide range of frac sand and specialized mineral.