Commenting on the performance of Baker Hughes (NYSE:BHI) over the next year, FBR Capital said the value in the company will be their ability to increase margins at the international level.
FBR said, "The acquisition of BJ Services is resulting in strong North American results. However, we believe the key to investors recognizing value over the next several quarters is execution on international margin improvement. While we believe sustainably higher international E&P activity should increase both volume and price over the next few years, we believe Baker Hughes' high U.S. frac exposure makes it a less favorable way to play the cyclical recovery in international oil investment. Baker Hughes is also more heavily levered to offshore markets than peers and thus sentiment could hurt the company as uncertainty remains around the timing and magnitude of a recovery in spending in the GOM...We are increasing our 2011 EPS to $3.25 and are introducing our 2012 EPS estimate at $3.75."
FBR said they're maintaining a "Market Perform" rating on the company.
Baker Hughes closed Tuesday at $49.28, gaining $0.91, or 1.88 percent. FBR raised their price target on them from $48 to $56.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment