Jefferies Starts Forum Energy Technologies (FET) at Buy; Multi-Yr Growth Trends Plus Active M&A

Jefferies initiates coverage on Forum Energy Technologies (NYSE: FET) with a Buy. PT $29.00.

"We think FET is well positioned to benefit from multiyear growth themes within OFS including (1) deepwater development; (2) rig automation; (3) just as powerfully, although we admit in some cases with a weaker proprietary position, infrastructure related to unconventional development in North America; and (4) pipeline refurbishment. FET’s significant NAM exposure (60% of 2011 pro-forma revenues) does suggest there is volatility in the earnings stream, but we note that there is resiliency in that fully ½ of 2011 revenues come from products consumed in the oilpatch and that an estimated 40% of U.S. revenues comes from production-oriented and mid-stream exposure."

"FET’s long term strategy includes continued acquisitions to supplement organic growth and a well-seasoned management team (for this small of a name) speaks to that ambition and reassures us regarding the company’s ability to source and close on deals. FET closed on eight acquisitions in 2011, including establishing the flow equipment and downhole tools segments."

For an analyst ratings summary and ratings history on Forum Energy Technologies click here. For more ratings news on Forum Energy Technologies click here.

Shares of Forum Energy Technologies closed at $24.19 yesterday.

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