UPDATE: BMO Capital Markets Reiterates Outperform Rating on National Oilwell Varco, Says Buy the Dip
In a report published Monday, BMO Capital Markets reiterated its Outperform rating on National Oilwell Varco (NYSE: NOV), but lowered its price target from $101.00 to $90.00.
BMO Capital Markets noted, “Adjusting for flat RT margins hits estimates hard and is the primary delta from NOV's 4Q report and 2013 outlook. We also adjusted PS&S and Distribution but the impacts there were far less significant. Clearly numbers will fall (ours more, as we were above consensus). While falling estimates always sting, the real imbalance here was expectational rather than fundamental with longer-term outlook intact. While not the best conference call we have heard for NOV, the advent of improving fund flow to the sector and a declining number of value situations, we'd bet the stock recovers fairly quickly from today estimate ‘recalibration.' The balance sheet remains strong and free cash flow provides ample fuel for more acquisition growth. Net-net, the global retooling story is anything but broken, and the stock remains one of the best values in the group. Investor interest/enthusiasm will return, and we believe NOV will stand and deliver.”
National Oilwell Varco closed on Friday at $74.14.
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