Source Energy Services Ltd Receives a Buy from Canaccord Genuity

By Carrie Williams

Source Energy Services Ltd (TSX: SHLE), the NA sector company, has received a rating update from a Wall Street analyst yesterday. Analyst John Bereznicki from Canaccord Genuity rated Source Energy Services Ltd (TSX: SHLE) a Buy, setting a C$9 price target.

Bereznicki observed:

“We are initiating coverage of Source Energy Services (Source) with a BUY recommendation and a C$9.00 price target. Calgary-based Source is the largest provider of frac sand (proppant) in Western Canada, with a well-established and fully integrated supply chain. We believe growing industry frac intensity is generating secular tailwinds for the company that complement its cyclical investment upside potential. Shares of Source are nonetheless down 36% since its recent IPO, driven by an oil price retrenchment and growing market anxiety of looming US proppant oversupply. We believe investor fears of “back-up” risk into the WCSB are likely overblown, and we base our C$9.00 target on a 2018E EV/EBITDA multiple of 6.0x.”

According to, Bereznicki is a 4-star analyst with an average return of 9.1% and a 47.9% success rate. Bereznicki covers the Basic Materials sector, focusing on stocks such as Essential Energy Services Ltd, Forbes Energy Services Ltd, and Trinidad Drilling.

Source Energy Services Ltd has an analyst consensus of Moderate Buy, with a price target consensus of C$9.

The company has a one year high of C$10.80 and a one year low of C$5.68. Currently, Source Energy Services Ltd has an average volume of 28.71K.

Source Energy Services Ltd. engages in the production, supply, and distribution of Wisconsin white frac sand. It operates through the following segments: Canadian Operations; Unites States Operations; and Corporate. Its services include end-to-end solutions through its Wisconsin mine assets, processing facilities, and unit train rail assets.

The company’s shares closed on Tuesday at C$6.70.