RON - Cooper Cameron Message Board

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Gold/Mining/Energy : RON - Cooper Cameron

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From: Dennis Roth	5/2/2007 7:25:52 AM
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Still one of our favorite names April 30, 2007 Goldman Sachs What's changed We raised our 2007/2008/2009 EPS forecasts by $0.15/$0.07/$0.06 or +3.9%/+1.4%/+1.1% to $4.02/$4.76/$5.24. We also raised our price target by $1 to $64 (=13x 2007 EV/DACF) due to higher estimates. Implications We maintain our Neutral rating for Cameron shares. 1Q07 results highlighted continued solid management execution and strong fundamentals. The combination of good earnings visibility ($3.8 billion backlog), leverage to secular deepwater growth (Subsea) and exposure to rig newbuild cycle make Cameron a good vehicle to invest in the “Backlog” theme. Valuation Cameron is trading at a 2007 EV-DACF/P-E of 13.5X/16.7X, versus 14.0X/17.6X for FTI and 11.7X/13.8X for National Oilwell Varco. Key risks Key risks to our thesis include: (1) A US/Global recession could result in weaker commodity prices and E&P capex cuts; and (2) Weakness in natural gas prices could lead to E&P capex cuts in North America.

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