- U.S. Silica (SLCA +1.6%) is upgraded to Outperform from Sector Perform with a $33 price target, raised from $27, at RBC Capital, which thinks shares have significant potential upside based on its estimate of mid-cycle earnings power, which is not being fully discounted by investors.
- The firm raises its 2017 EPS estimate to $0.25 from $0.10 and introduces a 2018 estimates EPS of $0.90 on expected higher frac sand volumes and higher contribution margins in the proppant solutions segment due to improved fixed cost absorption.
- RBC assumes frac sand vols rise 30% Y/Y in 2018, with proppant solutions' contribution margin of 28%.