Jefferies lowered its rating on National Oilwell Varco (NYSE: NOV) from Buy to Hold, mentioning that much of the intrinsic value is already priced into the stock.
The note also mentions that earnings results “didn't disappoint” and “prospects didn't worsen.”
Jefferies lowered its price target, “NOV is trading at 14.4x/12.9x our 2014/2015 EPS estimates versus a prior cycle average forward 12-month P/E of 17.2x. Our PT of $91 (was $95) is DCF-derived.”
2014 EPS estimate were revised from $6.45 to $5.80. Jefferies lowers its EPS estimates due to expectations of weakness in deepwater activity:
“However, we suspect at best tepid deepwater orders through 2015 as part of the industry's review/reset of deepwater activity, which poses risk to 2016-2017 revenue, in our view. We now model RS revenue of $7.3B in 2016E versus $9.4B in 2014E, although an improving margin outlook largely offsets.”
National Oilwell Varco is down by 1.69 percent on Wednesday's trading session.
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