UPDATE: Cowen Upgrades Baker Hughes (BHI) to Outperform
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(Updated - October 26, 2016 7:53 AM EDT)
Cowen upgraded Baker Hughes (NYSE: BHI) from Market Perform to Outperform with a price target of $65. Analyst Marc Bianchi said evidence the company is able to execute will draw investors.
"We upgrade our rating to Outperform on the back of the company's first solid quarter following the break-up of the merger with HAL. Our price target moves to $65, offering 20% upside. While BHI's message on go-to-market is still evolving, execution on cost cutting has been impressive and we see more to come. We now assume a total of $1B of cost cuts (up from $800MM earlier), compared to guidance of $650MM by year end 2016 and un-quantified upside in 2017. We believe many investors have been on the sidelines with BHI since the merger, waiting for tangible evidence of execution. With a first installment now complete, and additional upside on the horizon, we see the valuation gap between BHI and peers beginning to close. Our estimates move higher to reflect additional cost savings with our 2017 EBITDA 40% above consensus," said Bianchi.
Shares of Baker Hughes closed at $54.39 yesterday.
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