Range Resources Corp. : Anticipation of a bearish reversal
Range Resources, the Texan oil and gas exploration and production company should undergo some profit-taking after the rebound in recent sessions.
From a fundamental viewpoint, firstly, we note the high valuation of the company. PER for the current year is at 194.42x and expected at 68.85x for next year. With a valuation ratio of 9.89x, the group appears overvalued compared to its business activity. Regarding the financial situation, leverage is at 3.39x and debts are estimated at USD 2952.32 M for the current year.
From a technical viewpoint, the proximity of the USD 68.3 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.
Therefore, the proximity of mid-term resistance suggests a consolidation or a correction phase in the coming sessions. The most offensive will open a short position close to USD 68.3 to target a return on the USD 61.2 support. The position must be protected with a stop loss set close to USD 69.
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| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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31,4% |
34,5% |
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operating laverage (Delta EBIT / Delta Sales)
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1,81x |
1,47x |
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Net Margin (Net Profit / Revenue)
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6,12% |
14,2% |
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ROA (Net Profit / Asset)
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2,80% |
5,98% |
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ROE (Net Profit / Equities)
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8,53% |
13,9% |
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Rate of Dividend
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21,4% |
7,89% |
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