Analysts’ recommendations

Of the analysts surveyed by Reuters, 37% rated Emerge Energy Services (EMES) as a “buy” and 63% rated it as a “hold.” None of the analysts rated Emerge Energy Services as a “sell.” The median target price for Emerge Energy Services is $12, which implies an upside of 47% in a year from its current price of $8.17.

Most Analysts Rated Emerge Energy Services as a ‘Hold’

The above graph shows how analysts’ recommendations for Emerge Energy Services changed in the last 12 months. Notably, its mean target price fell from ~$22 in March to ~$11.3 currently.

In comparison, nearly 91% of the surveyed analysts rated Hi-Crush Partners (HCLP) as a “buy” and 9% rated it as a “hold.” Nearly 89% of the analysts rated U.S. Silica Holdings (SLCA) as a “buy,” while 59% rated Fairmount Santrol Holdings (FMSA) as a “buy.”

YTD performance

Emerge Energy Services rose 14% on November 1—the day its earnings were announced. However, it has fallen 35% YTD (year-to-date). In comparison, Hi-Crush Partners has fallen 50%, U.S. Silica Holdings has fallen 47%, and Fairmount Santrol has fallen 63% YTD. During the same period, the S&P 500 Index (SPX-INDEX) rose 14%.

Outlook

The demand for frac-sand depends on the level of drilling activity. The flat to marginally negative movement in the crude oil rig count in the last two months might impact frac-sand producers. Frac-sand companies saw increased demand in the past few quarters driven by rising rig counts since mid-2016.

“As we look out to the rest of 2017 and into 2018, we believe that the business will continue to post strong results based on sustained high demand for frac sand and continued execution of our strategic initiatives,” said Ted W. Beneski, chairman of Emerge Energy’s general partner.

Read HCLP, EMES: Are Frac Sand MLPs Currently Attractive? to learn more about the factors that are impacting frac-sand producers.

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