Core Laboratories (CLB) PT Lowered to $47 at JPMorgan on Dividend Cut

JPMorgan analyst Sean Meakim lowered the price target on Core Laboratories (NYSE: CLB) to $47.00 (from $50.00) after the company guided down 4Q19 and 1Q20 while reducing its quarterly dividend by 55% (to $0.25 v. $0.55).

The analyst stated "We believe the notion of downside surprises in NAM onshore into yearend was more than discounted by the market into 3Q results season, and even the weak 1Q20 outlook shouldn’t on its own impact the stock too much given the lack of visibility and downside risks into 2020 E&P spending. However, we believe the dividend cut has negative implications for the shares
tomorrow and in the coming weeks (yield falls to 2.1% v. 4.6% prior). We downgraded the shares a year ago as our Watched Pot thesis of structural negative estimate revisions was taking hold and saw multiple compression on the horizon for stocks with elevated multiples like CLB". No change to the Overweight rating.

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