KeyBanc Starts Eclipse Resources (ECR) at Buy

KeyBanc initiated coverage on Eclipse Resources (NYSE: ECR) with a Buy rating and a price target of $29.00.

Analyst David Deckelbaum said, "While shares have declined almost -11% since the Company’s IPO on June 20th vs. -5.5% for the EPX, we believe the relatively near-term headwinds from Appalachian basis differentials have plagued the stock and that longer-term fundamentals with highly superior production growth metrics present meaningful long-term value. We estimate that ECR will be able to increase production by more than 10x from current levels by the end of 2015, following 344% estimated growth in 2014 and another 75% in 2016, more than 3x the closest peer in 2015. What stands out in particular for ECR is the ability to generate this growth by only outspending cash flow by 46% in 2015 and actually generating free cash in 2016, even when assuming -$0.90/Mcf average basis differentials."

For an analyst ratings summary and ratings history on Eclipse Resources click here. For more ratings news on Eclipse Resources click here.

Shares of Eclipse Resources closed at $23.92 yesterday.

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