Goldman Sachs Resumes National-Oilwell Varco (NOV) at Buy, Benefits from New Rig Cycle

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Goldman Sachs resumes coverage on National-Oilwell Varco (NYSE: NOV) with a Buy. PT $97.00.

National-Oilwell is a key beneficiary of the current rig newbuild cycle, as the global drilling fleet primarily built in the 1970-80's reaches retirement. Also, given a foretasted $4.7 billion in free cash flow through 2014E, Goldman estimates above-expectation growth as NOV makes additional acquisitions and enhances value through its superior manufacturing expertise and industry-leading distribution.

Key catalysts, according to the firm, are: "(1) announcements of new orders for jackups, floaters, land rigs and FPSOs (Floating Production Storage and Offloading); (2) additional acquisition announcements (we estimate additional acquisitions could result in 19%-21% EPS CAGR through 2014E vs. our 12% CAGR forecast), (3) upward revisions to consensus estimates, and (4) the close of the announced RBN acquisition, which the company expects in 4Q12."

For an analyst ratings summary and ratings history on National-Oilwell Varco click here. For more ratings news on National-Oilwell Varco click here.

Shares of National-Oilwell Varco closed at $80.73 yesterday, with a 52 week range of $47.97-$89.95.

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