KeyBanc Starts Dresser-Rand Group (DRC) at Buy

KeyBanc initiated coverage on Dresser-Rand Group (NYSE: DRC) with a Buy rating and a price target of $80.

Analyst Robin Shoemaker said, "There is evidence today that after re-engineering certain upstream projects to reduce costs and accelerate the start-up of production, a number of previously stalled projects are back on track. DRC now projects full-year new unit bookings to be at least 10% higher than in 2013, even though bookings in 1H14 were 16% lower than in 1H13. The performance of the new unit business has been a concern to investors, so healthy gains in the pace of new unit bookings in 2H14 would be welcomed. DRC also expects a stronger level of aftermarket activity in 2H14. The Company believes that its full-year aftermarket bookings—adjusting for the impact of shutting the Company’s cogeneration facilities in Spain—will be up 5% from 2013. Since its IPO in 2005, the growth rate of aftermarket sales and bookings has ranged from 5% to 15% and averaged around 10%. We believe that the stage is set for DRC’s earnings to reaccelerate in 2015 after a disappointing year in 2014. We like companies that are positioned to benefit from a new wave of investment in upstream, midstream, downstream, and renewable energy projects. In our coverage, we believe DRC is the best way to invest in that theme."

For an analyst ratings summary and ratings history on Dresser-Rand Group click here. For more ratings news on Dresser-Rand Group click here.

Shares of Dresser-Rand Group closed at $67.99 yesterday.

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