Market Overview

Dawson Geophysical Well Positioned For Oil Price Recovery; Raymond James Upgrades To Strong Buy

Dawson Geophysical Well Positioned For Oil Price Recovery; Raymond James Upgrades To Strong Buy

Dawson Geophysical Co (NASDAQ: DWSN) has significant leverage to the commodity up-cycle. Raymond James’ J. Marshall Adkins upgraded the rating for the company from Market Perform to Strong Buy, with a price target of $8. The analyst noted that Dawson Geophysical’s current valuation is compelling and its balance sheet robust.

Mentioning that Dawson Geophysical had leverage to improving US oilfield activity, Adkins wrote, “Given the company’s strong balance sheet and the carnage amongst competitors, the company should be able to gain share and pricing in the up-cycle.”

Strong EBITDA And FCF Expected

Although the company’s active crew count, revenues and margins had been adversely impacted by falling oil prices, an expected recovery in seismic activity in 2017/18 should change that. Adkins expects the company to generate an EBITDA of $42 million in 2018.

Related Link: Jim Cramer Says "Everything Is Pretty Rosy" When Oil Prices Rise

Reduced competition, a result of the downturn, leaves Dawson Geophysical much better positioned in 2018. Although Dawson Geophysical failed to generate meaningful free cash flows in the last up-cycle owing to equipment upgrades, the company is likely to do so in the current one, given its top of the line equipment, which would keep its capex needs low, Adkins noted.

Despite solid free cash flows, the stock is trading at merely 50 percent of book value. “Given the environment, and attractive entry point, we are increasing our rating to Strong Buy,” the analyst wrote.

Latest Ratings for DWSN

Aug 2018Raymond JamesDowngradesStrong BuyOutperform
May 2016Raymond JamesUpgradesMarket PerformStrong Buy
Aug 2015Raymond JamesDowngradesOutperformMarket Perform

View More Analyst Ratings for DWSN
View the Latest Analyst Ratings

Posted-In: J. Marshall Adkins Raymond JamesAnalyst Color Long Ideas Upgrades Analyst Ratings Trading Ideas Best of Benzinga


Related Articles (DWSN)

View Comments and Join the Discussion!

Latest Ratings

GRPNMorgan StanleyMaintains1.5
HMSYCantor FitzgeraldReiterates33.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at