The firm lowered the price target to $16 from $10 for the independent energy company.
BMO Capital cut annual EPS estimates to 33 cents from 46 cents for fiscal 2014, and to a loss of 41 cents from 76 cents for fiscal 2015.
The firm also set annual cash flow per share estimates to $2.57 from $2.80 for fiscal 2014, and to $2.35 from $4.15 for fiscal 2015.
"Challenges are likely persist as the implied capital efficiencies aren't enough to drive attractive debt-adjusted growth or multiple compression, in addition to leverage creeping higher in 2015," said analyst Phillip Jungwirth of BMO Capital.
Separately, TheStreet Ratings team rates REX ENERGY CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate REX ENERGY CORP (REXX) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 40.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- REX ENERGY CORP 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, REX ENERGY CORP swung to a loss, reporting -$0.03 versus $1.07 in the prior year. This year, the market expects an improvement in earnings ($0.46 versus -$0.03).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, REX ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- REXX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 60.41%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, REXX is still more expensive than most of the other companies in its industry.
- You can view the full analysis from the report here: REXX Ratings Report