Demand For Oil States International (OSI) Businesses Improving Due To Sharp Recovery In Drilling Trends
Analysts at Susquehanna Financial reiterate their "positive" rating on Oil States International Inc (NYSE: OSI), while raising their estimates for the company. The target price for OSI has been raised from $48 to $50.
According to Susquehanna Financial, “We believe the sharp recovery in drilling trends in North America is lifting demand for Oil States’s Rental tools, Land drilling, and Tubulars businesses, while alleviating some of the operating margin strain that occurred during the 2009 drilling downcycle. In the Accommodations business, we are seeing more rooms at Wapasu put back into service quicker than expected and the revenue opportunity from the Kearl project provides attractive growth in 2011.”
Susquehanna Financial believes that “OIS has an attractive mix of secular growth and leverage to a cyclical NA drilling recovery.” Moreover, Oil States International has indicated a recovery in “program” work in Domestic steel mills for the first time in over a year, the analysts add.
Susquehanna Financial has raised its EPS estimates for 2010 and 2011 EPS from $2.30 to $2.39 and from $3.15 to $3.29, respectively.
