UPDATE: JP Morgan Initiates Coverage on Lufkin Industries

JP Morgan has published a research report that initiated coverage on Lufkin Industries LUFK with a Neutral rating and $60 price target. In the report, JP Morgan wrote, "We initiate coverage of Lufkin Industries with a Neutral rating and a $60 Dec-13 price target based on a 15x P/E. Lufkin is highly levered to the onshore U.S. oil market through artificial lift, which we believe provides strong, defensive fundamentals, thereby having less cyclical exposure to the onshore market. However, with limited pricing upside despite nearing 100% utilization, Lufkin's operational leverage may disappoint, particularly if execution issues linger. Our 2013 EPS estimate of $3.95 is below consensus at $4.23." Lufkin Industries is currently trading up 0.49 percent from Monday's $57.62 closing price.