Credit Suisse Starts CGG (CGG) at Underperform
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Credit Suisse initiates coverage on CGG (NYSE: CGG) with a Underperform rating and EUR17.50 price target.
Analyst Gregory Brown commented, "The transformation of CGG has continued exponentially. Gone are the asset-heavy days of a seismic player looking to dominate the acquisition market with north of 20 vessels. Today, CGG is an asset-lighter mix of GGR (a cash-generative and profitable multiclient and processing business), Sercel (the market-leading, but currently loss-making, equipment franchise) and a much downsized marine contract business. We applaud the gravitation towards higher-quality franchises, but we acknowledge CGG’s stretched balance sheet. We are also concerned about a dwindling client base for Sercel and a possible strategic misstep in Mexico by not targeting early 2D work."
Shares of CGG closed at $24.12 yesterday.
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