Analysts Offer Insights on Materials Companies: EnLink Midstream Partners (NYSE: ENLK), Hi-Crush Partners (NYSE: HCLP) and Range Resources Corp (NYSE: RRC)

By Ryan Adsit

Companies in the Materials sector have received a lot of coverage today as analysts weigh in on EnLink Midstream Partners (NYSE:ENLK), Hi-Crush Partners (NYSE:HCLP) and Range Resources Corp (NYSE:RRC).

EnLink Midstream Partners (ENLK)

B.Riley FBR analyst Robert Balsamo maintained a Hold rating on EnLink Midstream Partners today and set a price target of $17. The company’s shares opened today at $15.82.

Balsamo observed:

“EnLink Midstream Partners ( ENLK) reported a strong quarter, beating B. Riley FBR and consensus EBITDA estimates by ~6%. The outperformance was supported by accelerated growth in the partnership’s Oklahoma assets, which saw gathering and transportation volumes increase 18% Q/Q and processing volumes increase 12% Q/Q. This pace of growth is expected to remain strong and is behind mgmt’s revision to 2018 guidance. Mgmt will hold an earnings conference call on at 9AM.”

According to TipRanks.com, Balsamo is currently ranked with no stars on a 0-5 star ranking scale, with an average return of -7.4% and a 42.6% success rate. Balsamo covers the Basic Materials sector, focusing on stocks such as EnLink Midstream LLC, Nustar Energy LP, and USA Compression.

EnLink Midstream Partners has an analyst consensus of Moderate Buy, with a price target consensus of $17.83.

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Hi-Crush Partners (HCLP)

B.Riley FBR analyst Lucas Pipes maintained a Buy rating on Hi-Crush Partners today and set a price target of $18. The company’s shares opened today at $15.50, close to its 52-week high of $16.65.

Pipes commented:

“Partners (HCLP) released 2Q results with adjusted EBITDA of $81.5M within our and consensus’ original estimates and the company’s pre-release range of $80.0M- $82.5M. With bottlenecks along Class-1 railways improving, the company was able to increase its proppant sales volumes by 16% to 3.04M tons. Average realized prices decreased from $73/ ton to $70/ton but the company noted that this was largely due to increased volumes sold at the mine gate. Hi-Crush improved its contribution margin per ton to $30.94 versus $29.08 in 1Q18. The improvement was mostly due to the elimination of non-recurring costs realized in the prior quarter related to Class-1 rail congestion and winter maintenance at the company’s Wisconsin plants. Hi-Crush’s outlook for the remainder of 2018 is favorable.”

According to TipRanks.com, Pipes is a 5-star analyst with an average return of 9.1% and a 63.9% success rate. Pipes covers the Basic Materials sector, focusing on stocks such as Peabody Energy Corporation Comm, Newmont Mining Corporation, and Novagold Resources Inc New.

Hi-Crush Partners has an analyst consensus of Moderate Buy, with a price target consensus of $15.33.

Range Resources Corp (RRC)

In a report released yesterday, Rehan Rashid from B.Riley FBR maintained a Hold rating on Range Resources Corp, with a price target of $17. The company’s shares opened today at $15.23.

Rashid observed:

“We have been fans of this management team and asset base for the last 15 years. During this period, we believe execution (but for the 2016 N. Louisiana acquisition) has been near flawless. We expect asset level execution to continue to be top tier. The NGL/Liquids exposure should continue to improve given nature of the asset base, which in turn should bode well for resilience of cash flows in 2019+. However, roughly, 68% of company production is still natural gas. As such, equity performance nearer term will remain tied to natural gas outlook. Near term, we remain neutral on gas price outlook. As such, despite what we see is material favorable improvement in capital structure, increasing liquids production, and significant free cash flow generation in 2020+ time frame, we remain patient and Neutral on the stock and reiterate our 12-month $17 price target.”

According to TipRanks.com, Rashid is a 4-star analyst with an average return of 18.0% and a 67.6% success rate. Rashid covers the Basic Materials sector, focusing on stocks such as Continental Resources, Lonestar Resources US, and Southwestern Energy.

Currently, the analyst consensus on Range Resources Corp is a Moderate Buy with an average price target of $19.29.

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