Oil Services & Equipment 4Q13 EPS Preview
Demand Growth Continues but Pricing Power Is Still Lacking
13 January 2014 ¦ 46 pages PT38.pdf
Several concerns are likely to grab the spotlight for 4Q13 OFS results, including
softening rates for deepwater rigs, continuing excess capacity in hydraulic
fracturing, political and budgetary issues delaying global energy projects, and a
notable lack of pricing power in the markets. We believe substantial industry
backlogs and a stronger economic backdrop may mitigate these risks as 2014
unfolds. HP and DRC are most likely to beat while NE, RDC, RIG, and DO have
the highest earnings risk.
Robin Shoemaker | Mark Brown, CFA
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Oilfield Services & Equipment
We Expect Oilfield M&A to Rebound in 2014 after Slowing in 2013
13 January 2014 ¦ 26 pages PT00.pdf
The valuations of M&A target companies remain attractive in terms of
price/tangible book and forward EV/EBITDA and P/E multiples. The slow pace of
M&A in 2013 does not portend more of the same in 2014, in our view. We believe
that oilfield M&A could accelerate this year based on the attractive valuations of
target companies with leading positions in high-growth markets.
Robin Shoemaker | Mark Brown, CFA
...In rank order, DRC, RDC, FTI, CAM, FET, and WFT lead
our list of potential M&A targets (see page 16)... |
