UPDATE: UBS Starts Core Laboratories (CLB) at Neutral

(Updated - December 13, 2016 9:29 AM EST)

UBS initiated coverage on Core Laboratories (NYSE: CLB) with a Neutral rating and a price target of $125. Analyst Sasha Sanwal thinks recovery is priced in.

Sanwal explained, "Core Laboratories (CLB) is a niche oil services company focussed on reservoir optimization. The company's value proposition comes from its wide competitive moat, asset-light business model, and capital discipline. CLB has a relatively stable revenue base with ~90% of revenues derived from development and production related oilfield activity (~10% from exploration) as well as a global footprint and high quality customer base. These factors combine to create a highly defensible business model with best-in-class industry returns (ROIC/FCF). Our Neutral rating reflects our view that CLB's long-term growth prospects are fairly valued, which together with a lower historical beta to crude prices than peers, leaves limited potential upside from a multiple re-rating as we progress through the cycle, in our view. However, given CLB's 2% dividend yield and the potential for resumption of meaningful buybacks in 2017, we also see limited potential downside."

For an analyst ratings summary and ratings history on Core Laboratories click here. For more ratings news on Core Laboratories click here.

Shares of Core Laboratories closed at $120.81 yesterday.

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