Market Overview

JPMorgan Starts Dril-Quip, Frank's At Neutral; Oceaneering At Underweight

JPMorgan Starts Dril-Quip, Frank's At Neutral; Oceaneering At Underweight

JPMorgan's Sean Meakim initiated three offshore service companies reflecting the firm's top picks in a negative near-term outlook for the offshore oil market. Meakim initiated Oceaneering International (NYSE: OII), Dril-Quip, Inc. (NYSE: DRQ) and Franks International NV (NYSE: FI) at Underweight, Neutral and Neutral, respectively.

Meakim believes the three companies are stronger than most oil service companies. "With niche proprietary technology, attractive market dynamics including reasonable moats, and strong balance sheets, these companies represent some of the few remaining strategic assets within oil services," said Meakim.

Related Link: R.F. Lafferty Bullish On Marathon Oil, Says PayRock Deal Is A "Good" Buy

The analyst said there is significantly more downside risk to the offshore market to come, however. "With our base outlook for subsea equipment orders to remain below 2014 levels through 2017, we continue to see ~20–30 percent downside risk to industry expectations as the cadence of major deepwater FIDs stretches further right," said Meakim.

At Time Of Writing...

  • Frank's International was up 0.64 percent at $14.82.
  • Dril-Quip was down 0.13 percent at $60.45.
  • Oceaneering International was down 0.19 percent at $31.41.

Latest Ratings for DRQ

Oct 2019MaintainsUnderweight
Sep 2019MaintainsNeutral
Feb 2019UpgradesUnderweightEqual-Weight

View More Analyst Ratings for DRQ
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas Short Ideas Commodities Initiation Markets Analyst Ratings Trading Ideas


Related Articles (DRQ + FI)

View Comments and Join the Discussion!

UBS Still Says Sell Tesla, Hold SolarCity

Worst Performing Industries For June 22, 2016