Is Memorial Resource Development's Post-1Q16 Rally Justified?
Wall Street analysts’ ratings for Memorial Resource Development
Currently, ~71% of Wall Street analysts rate Memorial Resource Development (MRD) as a “buy,” and ~29% of analysts rate it as a “hold.” There are no “sell” recommendations on the stock.
The median price target from these recommendations is $17.36, ~29% higher than MRD’s May 10, 2016, closing price of $13.42.
Based on Wall Street analysts’ median price targets, upstream companies Pioneer Natural Resources (PXD), EOG Resources (EOG), and Marathon Oil (MRO) have potential upsides of ~12%, ~6%, and ~24%, respectively, from their May 10, 2016, closing prices.
The SPDR S&P Oil and Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies. The Direxion Daily S&P Oil & Gas Exploration & Production Bear 3x Shares ETF (DRIP) is a leveraged inverse ETF that invests in oil and gas exploration and production companies.
Memorial Resource Development’s individual recommendations
As shown in the above table, MRD’s most recent “buy” recommendation came from Wunderlich Securities, and it was issued on May 11, 2016. Wunderlich Securities assigned Memorial Resource Development a target price of $16, ~19% higher than its May 10, 2016, closing price of $13.42.
Wunderlich Securities expects MRD to reach the target price within the next 12 months.
Memorial Resource Development’s lowest target price
The lowest target price for Memorial Resource Development came from Seaport Global Securities. Seaport assigned MRD a target price of $11, ~18% lower than its May 10 closing price of $13.42.
Seaport Global Securities issued its Memorial Resource Development recommendation on May 10, 2016, and it expects MRD to reach the target price within the next 12 months.
Now let’s try to judge how MRD’s stock price will move following its 1Q16 earnings.
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