In a report published Tuesday, Wunderlich Securities analyst Abhishek Sinha reiterated a Hold rating on Hi-Crush Partners LP and raised the price target from $42.00 to $65.00.
In the report, Wunderlich Securities noted, “Since our last publication on May 6, Hi-Crush announced new contracts and expects to grow its 2014 distributions by 24% that includes making a step change in its 2Q distributions. Additionally, HCLP plans to expand its Augusta capacity by 1 mmt/y by 3Q14. We also expect HCLP to acquire Whitehall assets as a dropdown in 2015.
"Pricing and demand signals also appear strong for HCLP that is now over 75% contracted with long term take or pay contracts. We review and incorporate the additional details in our model, which drives our target to $65. However, with the stock's current trading price of $65.56, implying a 4.2% yield, we believe the potential growth catalysts are largely priced in and risk/reward ratio is balanced at this point. We maintain our Hold rating.”