UPDATE: Morgan Stanley Maintains on National OilWell Varco Following Solid 4Q13 Results
According to a report published Monday, Morgan Stanley analyst Igor Levi reiterated equal weight on National OilWell Varco (NYSE: NOV) and maintained the price target at $88. In spite of solid 4Q13 results and strong near term outlook, Levi expected a drop in orders in 2H14, which balances out recent results.
In the report, Morgan Stanley explained, "We see low volatility around earnings expectations and see relative performance driven by multiple expansion or contraction, requiring either (i) positive sentiment around backlog growth or (ii) a meaningful increase in cash distribution. Over the past 12-months, NOV's forward P/E has hit a 30% discount vs. the OSX, despite its backlog growing 37% due to anticipation of order weakness on softening dayrates. This is likely to occur in 2H14, causing the backlog to roll in 2015."
On Friday, National OilWell Varco closed at $75.01.
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