UPDATE: J.P. Morgan Initiates Coverage on Superior Energy Services on Compelling Investment Opportunity

In a report published Thursday, J.P. Morgan analyst J. David Anderson initiated coverage on

with an Overweight rating and $32.00 price target. In the report, J.P. Morgan noted, “Occupying a unique corner of U.S. Oilfield Services, Superior Energy offers a compelling investment alternative as a diversified, mid-cap service company that retains some of the characteristics of a small cap, yet with considerably less volatility. Setting itself apart from the smaller US land service companies, the story has three key elements: a base US land business that generates free cash flow (but little pricing power); international expansion that pulls in product lines; and core earnings strength from its rentals business and Gulf of Mexico exposure. While Superior does not have the technology, product line depth, or project management capabilities of the diversified large caps, it also doesn't need to spend the R&D and capex required to compete with the likes of SLB, HAL, and BHI. We initiate coverage of Superior Energy with an Overweight rating and a Dec-2014 price target of $32.” Superior Energy Services closed on Wednesday at $25.59.