Don't let it get away!
Help yourself with the Fool's FREE and easy new watchlist service today.
While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of RPC, (NYSE: RES ) climbed 3% this morning after Goldman Sachs upgraded the oilfield services specialist from "neutral" to "buy".
So what: Along with the upgrade, analyst Michael Cerasoli raised his price target to $22 (from $18), representing about 22% worth of upside to Friday's close. While value investors might be turned off by RPC's big run over the past year, Cerasoli believes that there's plenty of room to run given the strong tailwinds still working in the company's favor.
Now what: Goldman cited four key drivers that RPC shareholders should continue to benefit from:
1) accelerating completion rate by oil and gas drillers,
2) RPC's exposure to the attractive Permian in West Texas,
3) a healthy balance sheet, and,
4) strong prospects for increased dividends and buybacks.
Of course, when you couple the stock's hot price action with RPC's sensitivity to volatile oil prices, I'd wait for a wider margin of safety before buying into those positives.
More compelling energy picks
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.