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In a report published Friday, BMO Capital Markets analyst Michael Mazar reiterated an Outperform rating on
Precision Drilling Corp., and raised the price target from $11.00 to $13.00.
In the report, BMO Capital Markets noted, “PD reported a Q2/13 loss per share of $0.02, excluding one-time items, in line with our estimate and consensus losses of $0.03 and $0.01, respectively. Consolidated revenue of $379 million was higher than our forecast of $350 million as both contract drilling and completion and production revenues were modestly better than expected. Utilization in both Canada and the U.S. was moderately higher than expected; however, this was offset by slightly lower than expected day rates. Operating margins of 32% matched our assumption. PD also announced that it will be building five contracted rigs for its North American fleet, three for the U.S. and two for Canada, and will be upgrading one in Mexico. The new builds validate our thesis that demand for high-spec, high horsepower rigs in North America is improving and we expect further new-build announcements over the next several quarters. PD's track record for delivering top-quality new-builds in a cost-effective and timely manner should allow the company to ‘punch above its weight' in terms of market share of new-build rigs, especially in Canada.”
Precision Drilling Corp. closed on Thursday at $10.11.
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