Core Labs Shares Receive New Buy Recommendation At D.A. Davidson

D.A. Davidson’s Sonny Randhawa believes the premium at which Core Laboratories N.V. CLB is currently trading is “more than justified” given the company’s superior returns, competitive positioning and lower capital requirements.

Randhawa initiated coverage of the company with a Buy rating and price target of $136.

A Rare Stock

The analyst believes Core Laboratories is “a rare oil service stock that can outperform throughout the cycle,” and that the company’s innovation and cutting edge technologies have helped create meaningful value for not only its own shareholders but also for those of its clients, worldwide.

Related Link: Loop Capital Initiates Coverage On Core Laboratories At Hold, Announces $120 PT

“While the number of wells drilled tend to fluctuate with the direction of commodity prices, on a relative basis oil & gas companies are increasing expenditures on technology services to improve their understanding of the reservoir and increase production from existing fields,” Randhawa mentioned.

Well Positioned To Benefit

Given the current low commodity price environment, the analyst believes operators are more focused on technologies and services that can help lower costs of finding, developing and producing oil and gas.

According to the D.A. Davidson report, “A key component of CLB’s strategy has been to broaden the services and products available to clients globally. Today, CLB boasts an international platform spanning 50 countries and over 70 field offices.”

Over the past three years, international revenues have accounted for 55 percent of the company’s total revenue.

Randhawa expects Core Laboratories’ production enhancement segments to benefit from improved activity in North America in H2:16.

Full ratings data available on Benzinga Pro.