Wells Fargo Upgrades Lufkin Industries (LUFK) to Outperform

February 19, 2013 6:45 AM EST
Get Alerts LUFK Hot Sheet
Price: $88.49 --0%

Rating Summary:
    1 Buy, 10 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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Wells Fargo upgraded Lufkin Industries (NASDAQ: LUFK) from Market Perform to Outperform and raised its valuation from $58-65 to $78-83.

The firm comments, "Since we initiated coverage on LUFK with a Market Perform on 12/10/12, the bull case for spending on artificial lift, especially on rod lift in North America, has only strengthened, gaining clarity and solidity. At the company-specific level, we’re also sufficiently confident that LUFK really is turning the page from a chapter of transformative investment overload to one of increasingly profitable growth, defined by expanding incremental margins. Our EBITDA/EPS for (1) 2013E, do fall from $260MM/$3.90 to $248MM/$3.65 on later starts (March/April vis-àvis January) starts for both sales operations at the Romanian facility and the rebound in NAM order flow and shipments; and (2) 2014, are introduced at $320MM/$4.95. For valuation, we’re shifting to a 2014 basis, and maintaining our target EV/EBITDA multiples of 9.0-9.5x, which we believe is warranted in this M&A environment and boosts LUFK’s valuation from $58-65 to $78-83."

For an analyst ratings summary and ratings history on Lufkin Industries click here. For more ratings news on Lufkin Industries click here.

Shares of Lufkin Industries closed at $64.14 yesterday.

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