How Will RPC (RES) Stock React To This Analyst Upgrade?

NEW YORK (TheStreet) -- RPC Inc  (RES) stock was upgraded to "overweight" from "equal weight" this morning by analysts at Stephens.

The firm set its price target on shares of the oil and gas company at $27.

Shares of RPC are down -0.78% to $21.58 this morning.

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Separately, TheStreet Ratings team rates RPC INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate RPC INC (RES) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RES's revenue growth has slightly outpaced the industry average of 20.4%. Since the same quarter one year prior, revenues rose by 27.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RES's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.94, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 56.6% when compared to the same quarter one year prior, rising from $40.42 million to $63.28 million.
  • Powered by its strong earnings growth of 52.63% and other important driving factors, this stock has surged by 48.20% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • RPC INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, RPC INC reported lower earnings of $0.77 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $0.77).
  • You can view the full analysis from the report here: RES Ratings Report

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