B.Riley FBR Initiates a Buy Rating on Cypress Energy (CELP)

By Austin Angelo

In a report released today, Tom Curran from B.Riley FBR initiated coverage with a Buy rating on Cypress Energy (CELPResearch Report) and a price target of $11. The company’s shares closed last Monday at $7.76, close to its 52-week high of $8.10.

Curran commented:

“We are initiating coverage of L.P . (CELP) with a Buy rating and a 12-month price target of $11 per common unit. We are positive on the secular and cyclical outlooks for spending on U.S. energy and water infrastructure inspection and integrity services, where Cypress is a proven, rising player. We like the company’s highly aligned, dedicated sponsor; capex-light flexible PIS model; distribution coverage, balance sheet support, and upside potential; and growth strategy of sponsor acquisition drop-downs. Our valuation reflects a peer group– derived target EV/EBITDA multiple of 8.1x, which points to a total potential return of 58%, comprised of 46% expected unit price appreciation and an 11% distribution yield.”

According to TipRanks.com, Curran has currently no stars on a ranking scale of 0-5 stars, with an average return of -10.4% and a 36.9% success rate. Curran covers the Basic Materials sector, focusing on stocks such as Solaris Oilfield Infrastructure Inc, Independence Contract Drilling, and Select Energy Services Inc.

Cypress Energy has an analyst consensus of Moderate Buy, with a price target consensus of $11.

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Based on Cypress Energy’s latest earnings release for the quarter ending June 30, the company reported a quarterly net profit of $5.37 million. In comparison, last year the company had a net profit of $3.41 million.

Based on the recent corporate insider activity of 20 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CELP in relation to earlier this year.

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Cypress Energy Partners LP engages in the provision of essential midstream services, including pipeline inspection, integrity and hydrostatic testing services to energy companies and vendors. It operates through the following three segments: Pipeline Inspection, Pipeline & Process and Water & Environmental Services.