Wells Fargo Downgrades C&J Energy Services (CJES) to Market Perform
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Price: $0.31 --0%
Rating Summary:
6 Buy, 14 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
6 Buy, 14 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo downgraded C&J Energy Services (NYSE: CJES) from Outperform to Market Perform and lowered its valuation range to $17.00 to $19.00 from $24.00 to $26.00.
Analyst Matthew D. Conlan said, "Following worse-than-expected Q1 results that reset our 2013/2014 EPS expectations lower, we are stepping to the sidelines on CJES, downgrading the stock to Market Perform with a new valuation of $17-19 (vs. prior $24-26), still based on 5.0-5.5x (reduced) 2014E EBITDA. In addition to fighting the known headwinds of contract roll-overs, CJES has also been hurt by increased market-share competition from larger competitors that are intent on increasing the utilization of their frac fleets, particularly for 24-hour work."
He continued, "While we expect the U.S. market to see gradual improvement in activity during 2013, we do not forecast any rate improvement and we think these larger companies will continue to be advantaged in winning business at the expense of smaller competitors like CJES. CJES has seemingly conceded some lost market share opportunity by deciding to indefinitely delay the deployment of its recently delivered 9th frac fleet and to shelve (for the time being) the possibility of building a 10th fleet for late 2013 deployment."
The firm cut 2013/2014 EPS estimates to $1.48/$1.71 from $2.49/$2.60.
For an analyst ratings summary and ratings history on C&J Energy Services click here. For more ratings news on C&J Energy Services click here.
Shares of C&J Energy Services closed at $18.35 yesterday.
Analyst Matthew D. Conlan said, "Following worse-than-expected Q1 results that reset our 2013/2014 EPS expectations lower, we are stepping to the sidelines on CJES, downgrading the stock to Market Perform with a new valuation of $17-19 (vs. prior $24-26), still based on 5.0-5.5x (reduced) 2014E EBITDA. In addition to fighting the known headwinds of contract roll-overs, CJES has also been hurt by increased market-share competition from larger competitors that are intent on increasing the utilization of their frac fleets, particularly for 24-hour work."
He continued, "While we expect the U.S. market to see gradual improvement in activity during 2013, we do not forecast any rate improvement and we think these larger companies will continue to be advantaged in winning business at the expense of smaller competitors like CJES. CJES has seemingly conceded some lost market share opportunity by deciding to indefinitely delay the deployment of its recently delivered 9th frac fleet and to shelve (for the time being) the possibility of building a 10th fleet for late 2013 deployment."
The firm cut 2013/2014 EPS estimates to $1.48/$1.71 from $2.49/$2.60.
For an analyst ratings summary and ratings history on C&J Energy Services click here. For more ratings news on C&J Energy Services click here.
Shares of C&J Energy Services closed at $18.35 yesterday.
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