On Jun 18, Zacks Investment Research upgraded offshore
drilling equipment maker,
) to a Zacks Rank #2 (Buy).
DRIL-QUIP INC (DRQ): Free Stock Analysis
LUFKIN INDS (LUFK): Free Stock Analysis
NATURAL GAS SVC (NGS): Free Stock Analysis
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Why the Upgrade?
The operating environment and growth prospects seem bright for
Dril-Quip, as reflected by the rising earnings estimates for this
leading engineering company. Over the last 60 days, the Zacks
Consensus Estimate for the second quarter of 2013 has increased
2.3% to 88 cents per share, while that for 2013 rose 2.73% to
$3.76 per share.
The momentum has been strong since Dril-Quip released its first
quarter earnings results on May 7. Earnings per share came in at
98 cents, exceeding the Zacks Consensus Estimate of 80 cents by
22.50% and improving 30.66% from 75 cents a year ago. The
outperformance was mainly backed by growth in product and service
revenues as demand for offshore equipment increased.
With respect to the earnings trend, Dril-Quip delivered positive
earnings surprises in 3 of the last 4 quarters with an average
beat of 7.02%. The long-term expected earnings and sales growth
projections of 14.50% and 6.93%, respectively, are also fairly
Additionally, Dril-Quip's first quarter backlog witnessed a 16%
sequential as well as 45.8% year-over-year improvement. We also
expect large orders in 2013 from the Gulf of Mexico and Brazil,
with rising demand and activity level in these regions. This
gives it the financial flexibility to take advantage of growth
opportunities while returning capital to shareholders.
Other Stocks to Consider
There are certain other equipment makers in the energy sector
that are worth considering. These include
Natural Gas Services Group Inc.
Lufkin Industries Inc.
). All these stocks carry a Zacks Rank #2 (Buy).