Why RPC, Inc. Might Keep Rallying

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. 

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