UPDATE: Dahlman Rose Initiates Coverage on US Silica Holdings

According to a research report released this morning, Dahlman Rose has initiated U.S. Silica Holdings Inc. SLCA with a Buy rating and $25 PT. Dahlman Rose explained in the report, “We expect US Silica to grow pro forma operating earnings from roughly $0.80 in 2011 to $2.10 by 2013 based on two growth projects that came on-line in 4Q11, the re-contracting to market prices of $70-$80 per ton from roughly $50 per ton (most of which has already occurred), and the entrance into resin-coated sand (RCS) by 2013. We believe there could be upside to EPS estimates from lower operating cost inflation than modeled, higher roll-over prices, the potential Greenfield frac sand expansion, and from a second RCS line.” U.S. Silica Holdings closed yesterday at $21.09.