MDU Resources "outperform," target price raised

06/30/08 - Robert W. Baird

NEW YORK, June 30 (newratings.com) - Analysts at Robert W Baird maintain their "outperform" rating on MDU Resources Group Inc (MDU), while raising their estimates for the company. The target price has been raised from $36 to $38.

In a research note published this morning, the analysts mention that the company is expected to be a significant beneficiary of the rise in oil and natural gas prices, since it is less than 5% hedged on oil production and 45%-50% hedged on natural gas prices in the remainder of 2008. MDU Resources continues to aggressively pursue drilling activity in the Bakken region, with the company likely to have spudded a 14th well and continued operation of three rigs, the analysts add. The EPS estimates for 2008, 2009 and 2010 have been raised from $2.20 to $2.45, from $2.35 to $2.85 and from $2.50 to $2.90, respectively.