Jefferies Raises Price Target on Patterson-UTI Energy (PTEN), Company Adds Rigs
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Price: $12.34 +1.31%
Rating Summary:
21 Buy, 15 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
21 Buy, 15 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is reiterating its Buy rating on shares of Patterson-UTI Energy (NASDAQ: PTEN) and is raising its price target to $42 from $38.
Due to an anticipated higher rig count, slightly higher margin/rig day ratio, and the expansion of the company's pressure pumping fleet next year, the firm is increasing its 2011 EPS estimate to $2.34 from $2.29 and its 2012 EPS estimate to $3.40 from $3.14.
The firm believes that PTEN may favor positively from the trend of more term contracts for conventional or legacy rigs. Management highlighted that they were awarded to secure several 2-year commitments on conventional rigs at higher rates.
An analyst at Jefferies comments, "Echoing other service calls, results at PTEN's pressure pumping segment continue to exceed expectations from a revenue and margin standpoint. Factoring in management's Q3 guidance, we have increased our 2012 gross profit expectation for this segment to $425 million from $325 million to account for better pricing and margins as well as the newly disclosed 140k HP increase in capacity next year."
Jefferies is raising its FY11 and FY12 EPS estimates to $2.34 and $3.40 from $2.29 and $3.14. The firm is also increasing its revenue estimates for the two years to $1.01 billion and $1.37 billion from $977.8 million and $1.22 billion.
For more ratings news on Patterson-UTI Energy click here and for the rating history of Patterson-UTI Energy click here.
Shares of Patterson-UTI Energy closed at $32.83 yesterday.
Due to an anticipated higher rig count, slightly higher margin/rig day ratio, and the expansion of the company's pressure pumping fleet next year, the firm is increasing its 2011 EPS estimate to $2.34 from $2.29 and its 2012 EPS estimate to $3.40 from $3.14.
The firm believes that PTEN may favor positively from the trend of more term contracts for conventional or legacy rigs. Management highlighted that they were awarded to secure several 2-year commitments on conventional rigs at higher rates.
An analyst at Jefferies comments, "Echoing other service calls, results at PTEN's pressure pumping segment continue to exceed expectations from a revenue and margin standpoint. Factoring in management's Q3 guidance, we have increased our 2012 gross profit expectation for this segment to $425 million from $325 million to account for better pricing and margins as well as the newly disclosed 140k HP increase in capacity next year."
Jefferies is raising its FY11 and FY12 EPS estimates to $2.34 and $3.40 from $2.29 and $3.14. The firm is also increasing its revenue estimates for the two years to $1.01 billion and $1.37 billion from $977.8 million and $1.22 billion.
For more ratings news on Patterson-UTI Energy click here and for the rating history of Patterson-UTI Energy click here.
Shares of Patterson-UTI Energy closed at $32.83 yesterday.
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