In a report released today, Tom Curran from B.Riley FBR maintained a Buy rating on Independence Contract Drilling (ICD), with a price target of $5. The company’s shares closed yesterday at $1.12, close to its 52-week low of $1.05.
Curran said:
“In light of ICD’s 2Q19 results and guidance, and our new 2H19-into-1H20 macro outlook, we are lowering our revenue/EBITDA estimates for 2019 from $224.4M/$61.4 to $206.6M/$52.2M and 2020 from $265.2M/$90.9M to $229.0M/$67.3M. On our new 2020 EBITDA estimate, our target multiple of 7.4x lowers our price target from $5.75 to $5. In our view, our estimate cuts are far less severe than the stock price appears to be discounting. Despite a declining rig count, including for several competitors who have signaled an expected decrease in their active rig counts for 3Q19, ICD has guided to higher sequential exit counts for both 3Q and 4Q. Additionally, management believes that ICD experienced the bottom of its active rig count late in the second quarter.”
According to TipRanks.com, Curran has 0 stars on 0-5 star ranking scale with an average return of -10.6% and a 36.7% success rate. Curran covers the Basic Materials sector, focusing on stocks such as Solaris Oilfield Infrastructure Inc, Select Energy Services Inc, and Ranger Energy Services Inc.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Independence Contract Drilling with a $5.92 average price target.
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Based on Independence Contract Drilling’s latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of $12.86 million. In comparison, last year the company had a GAAP net loss of $3.31 million.
Based on the recent corporate insider activity of 29 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 ICD in relation to earlier this year.
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Independence Contract Drilling, Inc. engages in the provision of land-based contract drilling services for oil and natural gas producers. It involves in owning an established rig manufacturing business and proprietary rig designs. The company was founded by Philip A. Choyce and Byron A. Dunn on November 4, 2011 and is headquartered in Houston, TX.
