Standpoint Research Starts CGG Veritas (CGV) at Buy; Going From Red to Black
CGV Hot Sheet
Rating Summary:3 Buy, 6 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Standpoint Research initiates coverage on CGG Veritas (NYSE: CGV) with a Buy. PT $31.00.
Standpoint analyst, Ronnie Moas, said, "The company will go from the red deep into the black as the shift from domestic and shale to offshore takes place in 2012 and there is recovery in the Gulf of Mexico. CGV expects 10%-15% revenue growth driven by price increases and volumes. The $1.68 consensus for next year is a bit high though but attainable … we are looking for a miss of $0.10-$0.20. The debt was restructured and nothing significant is payable before 2016. The CGV multiple to EBITDA is half of what they paid for their 2007 acquisition."
"CGV was not profitable in the last twelve months, but does have earnings potential of $1.50-$2.00 looking out to 2012-2013. CGV is a high-beta name and will move up and down with oil prices. This name is risky and earnings are hard to forecast – in fact, CGV has a history of missing its numbers. It is a lower lower quality name, but the risk reward is more favorable than others in the industry that are overbought and pressing up against their 52-week highs. Most of the names are within 10%-20% of that mark while CGV is 40% off. This name is not recommended for those already overweight Energy & Materials."
For an analyst ratings summary and ratings history on CGG Veritas click here. For more ratings news on CGG Veritas click here.
Shares of CGG Veritas closed at $23.11 yesterday, with a 52 week range of $15.08-$38.12.
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Standpoint analyst, Ronnie Moas, said, "The company will go from the red deep into the black as the shift from domestic and shale to offshore takes place in 2012 and there is recovery in the Gulf of Mexico. CGV expects 10%-15% revenue growth driven by price increases and volumes. The $1.68 consensus for next year is a bit high though but attainable … we are looking for a miss of $0.10-$0.20. The debt was restructured and nothing significant is payable before 2016. The CGV multiple to EBITDA is half of what they paid for their 2007 acquisition."
"CGV was not profitable in the last twelve months, but does have earnings potential of $1.50-$2.00 looking out to 2012-2013. CGV is a high-beta name and will move up and down with oil prices. This name is risky and earnings are hard to forecast – in fact, CGV has a history of missing its numbers. It is a lower lower quality name, but the risk reward is more favorable than others in the industry that are overbought and pressing up against their 52-week highs. Most of the names are within 10%-20% of that mark while CGV is 40% off. This name is not recommended for those already overweight Energy & Materials."
For an analyst ratings summary and ratings history on CGG Veritas click here. For more ratings news on CGG Veritas click here.
Shares of CGG Veritas closed at $23.11 yesterday, with a 52 week range of $15.08-$38.12.
Discover Wall Street's best ratings calls with the pros - Upgrade to Ratings Insider Elite. Free Trial!
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