There’s a lot to be optimistic about in the Materials sector as 2 analysts just weighed in on Independence Contract Drilling (NYSE:ICD) and Trecora Resources (NYSE:TREC) with bullish sentiments.
Independence Contract Drilling (ICD)
B.Riley FBR analyst Tom Curran reiterated a Buy rating on Independence Contract Drilling yesterday and set a price target of $7.75. The company’s shares opened today at $3.95.
Curran observed:
“This morning (8/2), ICD reported 2Q18 earnings, posting solid beats on the top and bottom lines. As management telegraphed on the Sidewinder merger call (7/19/18), which was that ICD achieved “record quarterly revenues” and “costs which actually have come down significantly” in 2Q18, the driller delivered a 2Q18 top line of $25.8M (vs. consensus $25.6) and an EBITDA margin of 19%. ICD delivered EBITDA and EPS of $5M and ($0.08), versus the Street’s $4.4M and ($0.09). Higher revenue-per-day, driven by better day rates on new/renewed contracts, and lower operating costs, attributed to “recently implemented labor efficiency initiatives,” led to the beats. In the release, CEO Byron Dunn reiterated that management still expects to close the Sidewinder acquisition early in 4Q18.”
According to TipRanks.com, Curran has 0 stars on 0-5 star ranking scale with an average return of -4.0% and a 46.4% success rate. Curran covers the Basic Materials sector, focusing on stocks such as Select Energy Services Inc, Diamond Offshore Drilling, and Eco-Stim Energy Solutions.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Independence Contract Drilling with a $7.75 average price target.
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Trecora Resources (TREC)
B.Riley FBR analyst Sarkis Sherbetchyan assigned a Buy rating to Trecora Resources on August 1 and set a price target of $16.50. The company’s shares opened today at $13.20.
Sherbetchyan observed:
“PT) reported 2Q results after market close on Wednesday, 8/1, and hosted its earnings call Thursday morning. Shares closed ~14% lower. The 2Q results were below expectations due to lower-than-forecast volumes and increasing cost pressures; higher feedstock input costs, labor, freight, and nonrecurring expenses caused the margin pressure. (For more information on TREC’s 2Q results, refer to our 8/1 note: “Reports 2Q Sales/Adj. EBITDA below We note: customer-specific production issues caused the drop in 2Q prime product volumes. TREC anticipates a return to volume growth in 2H as these issues are resolved. TREC also expects to fill orders for a new PE plant later this year.”
According to TipRanks.com, Sherbetchyan is a 4-star analyst with an average return of 12.3% and a 64.1% success rate. Sherbetchyan covers the Consumer Goods sector, focusing on stocks such as Lightpath Technologies, Vishay Precision Group, and S&W Seed Company.
Trecora Resources has an analyst consensus of Moderate Buy, with a price target consensus of $15.75, a 19.3% upside from current levels. In a report released yesterday, Roth Capital also reiterated a Buy rating on the stock with a $15 price target.
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