Credit Suisse Downgrades Forum Energy Technologies

In a report published Thursday, Credit Suisse analyst Jonathon Sisto downgraded

to Neutral from Outperform, dropping its price target to $30.00 from $33.00. According to the report, the analyst's target price remains DCF-derived and is based on a WACC of 7.5 percent and a terminal growth rate of 3.0 percent. “We have written repeatedly that management got it – it being the fact that they needed to meet quarterly expectations (and execute with what they had) and slow the M&A train,” the report noted. “While the M&A train did slow, the execution has not followed through. 3Q13 results and margin improvements were a head fake in some ways. Now in 4Q, weather is transitory but customers pushing out deliveries implies weakening end-market demand and FET's inability to push back on its customers, and cost overruns and low margins on large drilling capital equipment items for international markets hints at a miss bid; miss-executed and/or miss-priced. We are downgrading shares of FET to Neutral as we think the overarching backdrop in energy and oilfield services is challenging and our inability to get ahead of the continuing missed guidance. We think muted US E&P capex will lead to a flattish 2014 US rig count, which will remain a headwind for FET's biggest business line, Drilling Equipment (31% of 2012 revenues).” FET closed Wednesday at $26.72 with shares trading down at 5.65 percent.