On Friday, RBC Capital Markets adjusted its stance on Range Resources (NYSE:RRC), a company listed on the New York Stock Exchange under the ticker NYSE:RRC. The firm downgraded the stock from Outperform to Sector Perform, albeit increasing the price target to $39 from $36. This move comes despite a positive view on the company's prospects, as the decision was influenced by the stock's recent strong performance relative to its peers and challenges in the natural gas market.
The analyst from RBC Capital cited a combination of factors for the downgrade, including a weak natural gas market and a downward revision in their natural gas price outlook. Despite these concerns, the firm acknowledges the company's strategic shift towards more liquids-rich drilling, which currently benefits from healthier pricing.
Range Resources, which derives approximately half of its revenue from natural gas, has been adjusting its operational focus. The company is increasing its activities in areas where the drilling of liquids-rich resources is more profitable, responding to the current market dynamics where natural gas prices have been less favorable.
The price target uplift to $39 reflects the company's exposure to natural gas liquids (NGLs). RBC Capital's revised target suggests a recognition of the value in Range Resources' diversified production portfolio, particularly in the context of NGL pricing strength.
This rating adjustment and price target change by RBC Capital Markets provide investors with an updated perspective on Range Resources' stock, incorporating recent market developments and the company's strategic responses to industry conditions.
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