UBS Raises Price Target on Helmerich Payne (HP) Following EPS Beat
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UBS reiterated a Buy rating on Helmerich & Payne (NYSE: HP), and raised the price target to $75.00 (from $72.00), following the company's 4Q earnings report. HP reported adjusted EPS of ($0.32), ahead of the consensus estimates of ($0.41).
Analyst Angie Sedita commented, "The land drilling market continues to see early signs of recovery with the start of pricing improvements. HP expects a 20% increase in its US rig fleet in Q4 (F1Q) and stated that pricing has slowly begun to rise. However, we expect only very modest price increases over the next months with moderate pricing power not until 2H-17. Additionally, we expect to see ~150 rigs upgraded to various forms of high-spec by the Big 3 (HP, NBR, PTEN) by mid-17 for a total of roughly 330 rigs. However, all high spec rigs are not alike and some drillers have 3 mud pumps, 4 engines and 1 mil-lb masts, while others are at 750k-lb masts and 2 mud pumps. Pipe racking capabilities also vary widely. Regardless, rig bifurcation is occurring and these rigs will earn premium rates. Quality crews are equally important as rig specs and HP continues to be at the top of the pack."
Shares of Helmerich & Payne closed at $67.18 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
Related EntitiesUBS, Raising Prices, Earnings
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