FBR Capital said they're maintaining their "Market Perform" rating on Bronco Drilling (Nasdaq:BRNC), citing potential solid term contracts for newbuild rigs.
"Bronco’s land drilling fleet has been more profitable than expected due to strong daily cash margins and rig day rate improvements giving the stock some momentum. We believe the announcement of newbuild rigs with solid term contracts could be a catalyst for BRNC. We estimate the company should have enough cash flow to build three new rigs in 2011 should it be able to obtain term contracts," said FBR.
In a press release on their most recent quarterly performance, Bronco revealed: "Results for the third quarter of 2010 were adversely affected by several non-recurring charges. These charges were related to the divestment of our well service assets, certain mechanical drilling rigs and ancillary drilling equipment, all of our trucking assets and a one-time loss related to Bronco MX. These items resulted in a pre-tax charge of approximately $28.5 million in the third quarter. Without these non-recurring charges, fully diluted earnings per share for the quarter would be a loss of $0.05."
Earnings per share for the quarter came in at a loss of $0.69 after a loss of $18.8 million.
Bronco closed Friday at $5.40, gaining $0.45, or 9.09 percent. FBR has a price target of $5 on them.
Showing posts with label FBR Capital. Show all posts
Showing posts with label FBR Capital. Show all posts
Monday, November 8, 2010
Thursday, November 4, 2010
Petrohawk Energy's (NYSE:HK) Margins, Debt Will Keep Company Under Pressure
Petrohawk Energy (NYSE:HK) has problems in the short term because of their high debt and margins being pressured, according to FBR Capital.
HBP drilling will continue to cause the company to struggle as a result in the short term.
FBR said, "We continue to remain fans of significant long-term asset value embedded within the Haynesville and Eagle Ford franchises. Near term, though, continued Haynesville drilling for HBP reasons despite margin squeeze and high (though manageable debt position) continues to give investors heartburn. Also, the Eagle Ford position, though highly prospective, still needs to mature, thereby exacerbating the funding gap issue. As such, we are reiterating our rating but are lowering our 12-month price target to $23/share to reflect a larger-than-expected funding gap."
Petrohawk closed Wednesday at 16.49, dropping $0.71, or 4.13 percent.
FBR maintains their "Outperform" rating on them, while Lazard Capital downgraded Petrohawk from "Buy" to "Hold." FBR has a price target of $20 on the energy company, dropping them from $23.
HBP drilling will continue to cause the company to struggle as a result in the short term.
FBR said, "We continue to remain fans of significant long-term asset value embedded within the Haynesville and Eagle Ford franchises. Near term, though, continued Haynesville drilling for HBP reasons despite margin squeeze and high (though manageable debt position) continues to give investors heartburn. Also, the Eagle Ford position, though highly prospective, still needs to mature, thereby exacerbating the funding gap issue. As such, we are reiterating our rating but are lowering our 12-month price target to $23/share to reflect a larger-than-expected funding gap."
Petrohawk closed Wednesday at 16.49, dropping $0.71, or 4.13 percent.
FBR maintains their "Outperform" rating on them, while Lazard Capital downgraded Petrohawk from "Buy" to "Hold." FBR has a price target of $20 on the energy company, dropping them from $23.
Wednesday, November 3, 2010
Hercules Offshore (Nasdaq:HERO) International Earnings Pressuring Company
Hercules Offshore, Inc. (Nasdaq:HERO) will probably have its international earnings pressure profits going forward because of the rolling over of contract to existing market rates, according to FBR Capital.
"We are introducing our 2012 estimates (0.75), which are meaningfully lower than our 2011 estimates due to lower international earnings as contracts roll over to current market rates. We maintain our Market Perform rating as we view HERO's risk-reward profile as roughly balanced. The company has the optionality from improvement in the shallow water GOM activity and de-leveraging," said FBR.
Hercules, which offers shallow-water drilling and marine services to the oil and natural gas exploration and production industry, closed Tuesday at $2.42, gaining $0.06, or 2.54 percent. FBR has a price target of $3.50 on them.
"We are introducing our 2012 estimates (0.75), which are meaningfully lower than our 2011 estimates due to lower international earnings as contracts roll over to current market rates. We maintain our Market Perform rating as we view HERO's risk-reward profile as roughly balanced. The company has the optionality from improvement in the shallow water GOM activity and de-leveraging," said FBR.
Hercules, which offers shallow-water drilling and marine services to the oil and natural gas exploration and production industry, closed Tuesday at $2.42, gaining $0.06, or 2.54 percent. FBR has a price target of $3.50 on them.
Noble Corporation (NYSE:NE) Has Solid Balance of Shallow, Deepwater Markets Says FBR
Liking the balanced exposure to shallow and deepwater markets, FBR Capital said they're maintaining their "Outperform" on Noble Corporation (NYSE:NE), although they're lowering the earnings per share estimates based on the Pemex contract extension.
FBR said, "We are lowering our EPS estimates to $0.53, $4.00, and $4.95 from $0.54, $4.15, and $5.10 for 4Q10, 2011, and 2012, respectively. Our new rates reflect the recent contract extension rates that Noble Corp. has received from Pemex...We are maintaining our rating for NE based on the company's balanced exposure to the shallow and deepwater markets and attractive valuation. The company has a strong backlog and ample liquidity to grow even after adding four modern deepwater units in the Bully and Globetrotter rigs."
Noble closed Tuesday at $34.46, gaining $0.28, or 0.82 percent. FBR has a price target of $42 on the drilling service provider.
FBR said, "We are lowering our EPS estimates to $0.53, $4.00, and $4.95 from $0.54, $4.15, and $5.10 for 4Q10, 2011, and 2012, respectively. Our new rates reflect the recent contract extension rates that Noble Corp. has received from Pemex...We are maintaining our rating for NE based on the company's balanced exposure to the shallow and deepwater markets and attractive valuation. The company has a strong backlog and ample liquidity to grow even after adding four modern deepwater units in the Bully and Globetrotter rigs."
Noble closed Tuesday at $34.46, gaining $0.28, or 0.82 percent. FBR has a price target of $42 on the drilling service provider.
Baker Hughes (NYSE:BHI) Needs to Improve International Margins Says FBR
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.
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.
Monday, October 25, 2010
Newfield Exploration (NYSE:NFX) Maximizing Returns on Asset Base
Newfield Exploration Company (NYSE:NFX) had its "Outperform" rating maintained on them by FBR Capital, citing a deep and diverse asset base.
FBR said, "Recognition of depth and diversity of asset base allowing capital allocation flexibility, and thus maximization of returns, has been well rewarded, allowing the stock to appreciate 18% during the third quarter compared to an average 8% for the peer group. Future absolute and relative outperformance/multiple expansion, successful Alberta Basin Bakken and Eagle Ford drilling and/or evidence of ability to pull forward cash flows faster (further acceleration in Monument Butte, Bakken, or other) than currently modeled is needed."
Newfield closed Friday at $59.11, gaining $0.20, or 0.34 percent. FBR raised the price target on Newfield from $65 to $72.
FBR said, "Recognition of depth and diversity of asset base allowing capital allocation flexibility, and thus maximization of returns, has been well rewarded, allowing the stock to appreciate 18% during the third quarter compared to an average 8% for the peer group. Future absolute and relative outperformance/multiple expansion, successful Alberta Basin Bakken and Eagle Ford drilling and/or evidence of ability to pull forward cash flows faster (further acceleration in Monument Butte, Bakken, or other) than currently modeled is needed."
Newfield closed Friday at $59.11, gaining $0.20, or 0.34 percent. FBR raised the price target on Newfield from $65 to $72.
Thursday, October 21, 2010
Weatherford (NYSE:WFT) Faces Risk Going Forward, Downgraded
Considered a high risk company and stock at this time, Weatherford International (NYSE:WFT) was downgraded by FBR Capital and Credit Agricole.
FBR lowered their rating from "Outperform" to "Market Perform," while Credit Agricole downgraded them from "Outperform" to "Underperform."
"We are downgrading WFT as we believe its risk/reward profile is less favorable than that of other stocks in our coverage group. In part, we believe the recovery in international markets will continue to be slower than many expect. This, coupled with the risk of how and when Weatherford settles the Foreign Corrupt Practices Act (FCPA) investigation and how the TNK-BP put is settled, adds an element of risk that we believe requires a higher potential return than we see in the stock," said FBR.
Weatherford closed at $17.37, gaining $0.20, or 1.14 on Wednesday. Credit Agricole has a price target of $18 on Weatherford, lowering it from $19, and FBR Capital dropped its price target on them from $23 to $21.
FBR lowered their rating from "Outperform" to "Market Perform," while Credit Agricole downgraded them from "Outperform" to "Underperform."
"We are downgrading WFT as we believe its risk/reward profile is less favorable than that of other stocks in our coverage group. In part, we believe the recovery in international markets will continue to be slower than many expect. This, coupled with the risk of how and when Weatherford settles the Foreign Corrupt Practices Act (FCPA) investigation and how the TNK-BP put is settled, adds an element of risk that we believe requires a higher potential return than we see in the stock," said FBR.
Weatherford closed at $17.37, gaining $0.20, or 1.14 on Wednesday. Credit Agricole has a price target of $18 on Weatherford, lowering it from $19, and FBR Capital dropped its price target on them from $23 to $21.
Wednesday, October 20, 2010
Plains Exploration & Production (NYSE:PXP) Downgraded by FBR Capital
Plains Exploration & Production (NYSE:PXP) was downgraded by FBR Capital from
"Outperform" to "Market Perform."
"Assuming current MMR stock price (our $4.50/Mcf long-term gas price assumption implies about 6 Tcfe gross deep shelf potential priced in) and a generous $2 billion in proceeds from deepwater asset sales, the remaining assets are currently valued at 4.7 times 2011 TEV multiple and 70% of 3P NAV. We note that comparable peer group trades at 5.5x and 55% of 3P NAV. We would like to see an actual price tag for the deepwater assets, continued deep shelf exploratory and development success, and execution on the remaining assets before we revisit our rating," said FBR.
Plains closed at $26.49 Tuesday, falling $1.23, or 4.44 percent. FBR has a price target of $30 on Plains.
"Outperform" to "Market Perform."
"Assuming current MMR stock price (our $4.50/Mcf long-term gas price assumption implies about 6 Tcfe gross deep shelf potential priced in) and a generous $2 billion in proceeds from deepwater asset sales, the remaining assets are currently valued at 4.7 times 2011 TEV multiple and 70% of 3P NAV. We note that comparable peer group trades at 5.5x and 55% of 3P NAV. We would like to see an actual price tag for the deepwater assets, continued deep shelf exploratory and development success, and execution on the remaining assets before we revisit our rating," said FBR.
Plains closed at $26.49 Tuesday, falling $1.23, or 4.44 percent. FBR has a price target of $30 on Plains.
Thursday, September 23, 2010
Comstock Resources (NYSE:CRK) Has "Market Perform" Maintained by FBR Capital
FBR Capital says it is maintaining their "Market Perform" on Comstock Resources, Inc. (NYSE:CRK).
"Our recent conversations with management suggest a willingness to slow down Haynesville activity to live within/close to cash flows. Also, a growing high condensate area focused Eagle Ford acreage position allows for improving flexibility in capital allocation. We are fans of the steps being undertaken, which signify a focus on returns, preservation of balance sheet strength, and gas price rebound optionality...However, we await a better entry point...," said FBR.
Comstock closed Wednesday at $21, gaining $0.21, or 1.01 percent.
FBR has a price target on the company of $25.
"Our recent conversations with management suggest a willingness to slow down Haynesville activity to live within/close to cash flows. Also, a growing high condensate area focused Eagle Ford acreage position allows for improving flexibility in capital allocation. We are fans of the steps being undertaken, which signify a focus on returns, preservation of balance sheet strength, and gas price rebound optionality...However, we await a better entry point...," said FBR.
Comstock closed Wednesday at $21, gaining $0.21, or 1.01 percent.
FBR has a price target on the company of $25.
Tuesday, September 21, 2010
FBR Capital Adds Pioneer (NYSE:PXD) to 'Top Pick' List; Drop Devon (NYSE:DVN)
FBR Capital reiterated its "Outperform" rating on Pioneer Natural Resources NYSE:PXD), adds to 'Top Picks' list, while dropping Devon Energy (NYSE:DVN) from the list.
"We are adding Pioneer Natural to our Top Picks list based on our expectations of a higher-than-guided production growth rate and recent operational change-driven material improvements in returns from its core Spraberry asset...We note that we are concurrently removing Devon Energy from our Top Picks list. We maintain an Outperform rating on Devon Energy shares, but are of the opinion that nearer-term risk/reward is better with Pioneer," said FBR.
Pioneer closed Monday at $66.89, up $1.51, or 2.31 percent. Devon closed at $62.93, gaining $0.96, or 1.55 percent.
"We are adding Pioneer Natural to our Top Picks list based on our expectations of a higher-than-guided production growth rate and recent operational change-driven material improvements in returns from its core Spraberry asset...We note that we are concurrently removing Devon Energy from our Top Picks list. We maintain an Outperform rating on Devon Energy shares, but are of the opinion that nearer-term risk/reward is better with Pioneer," said FBR.
Pioneer closed Monday at $66.89, up $1.51, or 2.31 percent. Devon closed at $62.93, gaining $0.96, or 1.55 percent.
Friday, September 10, 2010
Investors Shrug Off BP (NYSE:BP) Report with Transocean (NYSE:RIG)
Transocean (NYSE:RIG) investors are largely ignoring the report by BP (NYSE:BP) which pointed to them as being responsible for some of the failure which led to the explosion on the Deepwater Horizon oil rig.
Shares are at their highest level in over a month, reaching $59.70, a gain of $4.40, or 7.96 percent, at 12:07 PM EDT.
A report from FBR Capital Markets is probably one of the reasons for the surge in share price of Transocean, as they said in the report they believe Transocean will settle with BP from $1 billion to $2 billion.
FBR added that's significantly below the $6 billion to $7 billion they think shares of Transocean have been discounted at because of their potential liability in the oil spill.
There are still some questions as to whether or not Transocean will be liable for anything because of the contract they had with BP which provides them with total indemnification.
Much still rides on whether or not BP is designated as having been grossly negligent in the incident.
Shares are at their highest level in over a month, reaching $59.70, a gain of $4.40, or 7.96 percent, at 12:07 PM EDT.
A report from FBR Capital Markets is probably one of the reasons for the surge in share price of Transocean, as they said in the report they believe Transocean will settle with BP from $1 billion to $2 billion.
FBR added that's significantly below the $6 billion to $7 billion they think shares of Transocean have been discounted at because of their potential liability in the oil spill.
There are still some questions as to whether or not Transocean will be liable for anything because of the contract they had with BP which provides them with total indemnification.
Much still rides on whether or not BP is designated as having been grossly negligent in the incident.
Wednesday, September 8, 2010
Pioneer Natural Resources (NYSE:PXD) Upgraded by FBR Capital (Nasdaq:FBCM)
Citing the asset of Spraberry field, FBR Capital (Nasdaq:FBCM) upgraded Pioneer Natural Resources (NYSE:PXD) from "Market Perform" to "Outperform."
About the Spraberry field, an FBR analyst said, "...With a dominant 900,000 acre position (53% of total acreage available) in the Spraberry field, 20,000+ identified locations, and $1.1M to $1.2M per well, this asset base has the capacity to absorb a tremendous amount of capital and should allow the company to earn substantial above-average returns on it for decades to come."
FBR also increased the price target for Pioneer in a big way, moving it from $60 to $85.
Pioneer closed Tuesday at $61.83, losing $0.67, or 1.07 percent.
About the Spraberry field, an FBR analyst said, "...With a dominant 900,000 acre position (53% of total acreage available) in the Spraberry field, 20,000+ identified locations, and $1.1M to $1.2M per well, this asset base has the capacity to absorb a tremendous amount of capital and should allow the company to earn substantial above-average returns on it for decades to come."
FBR also increased the price target for Pioneer in a big way, moving it from $60 to $85.
Pioneer closed Tuesday at $61.83, losing $0.67, or 1.07 percent.
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