We are retaining our Neutral recommendation on Cameron
International Corp. with a target price of $51.00. The company has
a diversified product portfolio, specialty service capabilities and
proprietary technological expertise. Other positives for Cameron
include a strong backlog position, growing international operations
and a favorable perspective on subsea activity levels. However,
according to Cameron's current valuation, we believe that
shareholders should wait for a better entry point before
accumulating shares. Moreover, with markets competitive and pricing
weak, we see no visible catalyst in Cameron's business that could
significantly push the stock price higher.
Houston, TX-based Cameron International Corporation (CAM),
previously known as Cooper Cameron Corporation, is a leading
manufacturer of pressure control equipment used in onshore,
offshore, and subsea applications for oil and gas drilling,
production, and transmission. Following the change in the corporate
name in May 2006, the company re-branded its three business
segments into Drilling & Production Systems (DPS), formerly the
Cameron segment Valves & Measurement (V&M), formerly the
Cooper Cameron Valves segment and Process & Compression Systems
(PCS), formerly the Cooper Compression segment.
The products of the DPS segment (accounting for 61% of the
company's total EBITDA in 2013) include surface and subsea
production systems (the so-called Christmas Trees), blowout
preventers as well as drilling and production control systems. DPS
products are marketed under the brand names CAMERON, W-K-M, MCEVOY,
and WILLIS. Additionally, DPS manufactures elastomers (used in
pressure and flow control equipment) and other petroleum industry
applications. The DPS segment also handles the petroleum,
petrochemical, rubber molding, and plastics industries. The V&M
segment (28%) provides valves and related systems used in pressure
control and flow of oil and gas from the wellhead through pipelines
to refineries and petrochemical plants. The PCS segment's (11%)
products include reciprocating and centrifugal compressors used in
multiple oil and gas applications, such as production, storage,
withdrawal, processing, and transmission.
Cameron International Corporation (CAM): Read the
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