Send to a Friend Font Size: Increase Decrease

Wachovia Resumes Coverage on Exterran Holdings (EXH) with a Market Perform; Potential Remains Compelling, But Valuation Keeps Us On The Sidelines

More News related to EXH

More News related to New Coverage

March 23, 2009 8:17 AM EDT

Wachovia resumes coverage on Exterran Holdings Inc. (NYSE: EXH) with a Market Perform.

Wachovia analyst says, "We are resuming coverage with a change in analyst and a Market Perform rating on the shares as our concerns about the challenges EXH faces over the next 12 months have resulted in a valuation range of $17-21. Also, since mid-2008, the stock has exhibited a high positive correlation with the near-month natural gas contract, which our E&P analyst expects to remain in a $3-4/Mcf range over at least the next several months. But, we continue to see the potential for greater value creation in EXH’s unparalleled profile. As the dominant, global provider of natural gas compression fabrication, services, and after-market needs, EXH is best positioned to benefit from the secular growth trend in outsourcing and to become the lead provider of comprehensive surface production services, in our view. Also, EXH’s planned “sale” of its remaining U.S. compressors into Exterran Partners, LP offers ongoing accretive acquisition and/or cash return potential...EXH is the best long-term play on the secular growth trend in global natural gas compression, production, and processing service needs, in our view; its EXLP "drop down" plan offers ongoing cash return potential. Valuation keeps us on the sidelines."

To see more analyst ratings on EXH Click Here.

Exterran Holdings, Inc. is engaged in the full-service natural gas compression business. It provides operations, maintenance, service and equipment for oil and natural gas production, processing and transportation applications.