Ticonderoga Launches Coverage on Range Resources (NYSE:RRC)

Ticonderoga Securities started its coverage of Range Resources (NYSE:RRC) off with a "Buy" rating and a price target of $45, citing strong growth from Marcellus Shale and natural gas price support at current levels.

"RRC is an independent exploration and production company largely weighted toward natural gas, which accounts for 84% of its proven reserve base. While more than half of RRC’s production currently comes from the Mid-Continent/Southwest region of the U.S., the company’s reserves, growth, and upside are dominated by its activities in the Appalachian Basin and its leverage to the developing Marcellus Shale...While we have yet to identify any short-term catalyst for natural gas markets we see little downside in gas prices from here. RRC’s valuation should be viewed as an attractive entry point, especially for longer-term investors."

No one can be exactly sure, but one possible catalyst which could drive gas prices down is the ongoing recession. If people aren't able to afford current prices or incremental increases in natural gas, they will rebel or simply not pay it. Either way it could hurt natural gas companies.

There's a reason many natural gas companies have been buying up oil assets.

Range Resources closed Friday at $37.59, gaining $0.28, or 0.75 percent.

Exxon (NYSE:XOM) Downgraded by RBC Capital

RBC Capital Markets downgraded Exxon Mobil Corp. (NYSE:XOM), saying their exposure to the weak natural gas market makes them vulnerable.

This was a reference to the acquisition of XTO Energy in the early part of 2010, which resulted in Exxon becoming the largest natural gas company in the United States.

Natural gas companies have been attempting to diversify by acquiring oil assets because of the expectations the abundant supply of natural gas will keep the price of the energy source down.

RBC said the weak price of natural gas will damage the earnings of Exxon, along with their market valuation. They lowered the price target for the next 12 months from $76 a share to $70 a share, while downgrading them from "Outperform" to "Sector Perform."