Report
Valens Research

RRC - Embedded Expectations Analysis - 2019 12 02

Range Resources Corporation (RRC:USA) currently trades at a historical low relative to UAFRS-based (Uniform) Assets, with a 0.6x Uniform P/B. At these levels, the market has somewhat bearish expectations for the firm, but management is confident about their liquidity, costs, and capital allocation.

Specifically, management generated excitement markers when discussing the amount of liquidity they have available and when saying they are going to be opportunistic when executing their share repurchase program. Furthermore, they are confident they have improved their vehicle safety program and that GP&T costs are consistent with guidance. Moreover, they are confident they intend to finish the year with capital spending below budget and that their share repurchase program is valuable to shareholders. Additionally, they are confident Range's class-leading cost per foot and shallow base decline help support low and sustainable maintenance capital requirements.
Underlying
Range Resources Corporation

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.

Provider
Valens Research
Valens Research

In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:

  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
  • Stock analyst recommendations are not grounded in disciplined financial analysis
  • Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
  • Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available

We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.

  • Corporate credit ratings remain years behind the fundamental underpinnings of company performance
  • Stock analysts continue to make recommendations with deeply inherent biases
  • Research firms have failed to break down the walls between credit, equity, and macroeconomic research
  • The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming

The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.

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Valens Research

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