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In a report published Friday, Dahlman Rose & Co. reiterated its Buy rating on CARBO Ceramics
CRR, but lowered its price target from $99.00 to $84.00.
Dahlman Rose noted, “We had previously expected the company would be able to use lower pricing as a tool to improve volumes; however, we now expect both pricing and volumes to decrease in 2H12 due to more aggressive price pressures. Owing to low pricing levels, the company may elect not to increase volumes in order to keep their pricing throughout the cycle within its historical band of +/-15%. We are modeling pricing decreases of -15% in 4Q12 (was -8%) versus 4Q11 and are hopeful pricing/margins increase a bit in 2013 due to less Chinese inventory (after it is liquidated in 2012) and/or more activity in the Haynesville.”
CARBO Ceramics closed on Thursday at $68.48.
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