Morningstar | Slightly Raising Range Resources' Fair Value Estimate to Reflect Updated NGL Forecast. See Updated Analyst Note from 17 Jul 2018
To reflect our updated NGL outlook, we have slightly raised our Range Resources fair value estimate to $22 per share from $21. Although our fair value estimate is considerably above the stock’s current trading price of about $17 per share , we think the breadth of potential outcomes is so large that we would hesitate to call the shares undervalued at this point. We point to the wide discrepancy between our bull- and bear-case fair value estimate scenarios, $38/share and $ 8/share, respectively, and resulting extreme uncertainty rating as reasons investors should be cautious about jumping into the company at current prices. Our base-case fair value estimate is predicated on a long-term U.S. natural gas price of $3/mcf at Henry Hub and our NGL composite price of $25/bbl.Range is a Marcellus-focused E&P with high exposure to NGLs. Nearly 30% of the company's production is natural gas liquids, and management cites NGL resource potential of 3 billion barrels. The company has been a first mover on Marcellus NGL exports as the anchor shipper on Mariner East 1, a pipeline and export facility at Marcus Hook, Pennsylvania. Since 2016, the company has transported 20,000 bpd of both ethane and propane to Marcus Hook for export. And Range Resources has additional marketing agreements to move NGLs out of Appalachia via the Mariner West and ATEX pipelines.
For more information on our updated NGL forecast, please see our Energy Observer: "The Natural Gas Liquids Rubik's Cube Solved."
Range Resources is a holding company. Through its subsidiaries, the company is an independent natural gas, natural gas liquids and oil company, engaged in the exploration, development and acquisition of natural gas and oil properties, located in the Appalachian and North Louisiana regions of the United States, primarily in the Marcellus Shale in Pennsylvania and the Lower Cotton Valley formation in Louisiana.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.