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Why 86% of Wall Street Analysts Rate Hi-Crush Partners a ‘Buy’

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Analyst recommendations

Analysts’ consensus target price for Hi-Crush Partners (HCLP) for the next year is $16. The median target price implies a massive 57% price return over the next year, based on HCLP’s current price of $10.2. 86% of the analysts surveyed by Reuters have rated Hi-Crush Partners a “buy,” and 14% rated it a “hold.” None of the surveyed analysts rated HCLP a “sell.”

On December 15, Barclays initiated coverage on Hi-Crush Partners with an “equal weight” rating. Barclays assigned a target price of $12 to HCLP. On December 8, Seaport Global Securities initiated coverage on HCLP with a “buy” rating.

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EMES ratings

Of the analysts surveyed, 33% rated Emerge Energy Services (EMES) a “buy” and 67% rated it a “hold.” None of the surveyed analysts rated EMES a “sell.” The median target price of the stock is $11.50. The stock is currently trading at $7.15, which implies a price-to-return ratio of 61% in one year.

In comparison, US Silica Holdings (SLCA) got “buy” recommendations from 95% of surveyed analysts and Fairmount Santrol Holdings (FMSA) got “buy” recommendations from 59%.

HCLP and EMES price targets

Notably, Hi-Crush Partners had a mean price target of $25.88 in March 2017. The stock is trading at $10.2 currently. Its current mean target price is $14.9. Similarly, Emerge Energy Services had a mean price target of $22.1 in March 2017. EMES is trading at $7.15. Analysts have now given a mean price target of $11.30 to EMES.

It should be interesting to see how these frac sand MLPs perform. As drilling activity directly impacts the demand for frac sand, any slowdown in drilling activity could further hurt frac sand companies’ stocks. Notably, small-cap stocks such as Hi-Crush Partners and Emerge Energy Services tend to be riskier, with much higher price fluctuations compared to large-cap stocks.

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