- Helmerich & Payne (HP -2.2%) is maintained with a Buy rating and a higher target price of $72, raised from $63, at UBS following mixed FQ2 results.
- UBS says that while some temporary stacking and personnel costs likely will go away by Q4, it appears HP's underlying profitability is tracking below expectations, and with declining EBITDA, the company likely is consuming a small amount of cash to pay the dividend later this year.
- However, the firm says a strong contract backlog and nearly $900M of cash and equivalents leave HP well positioned to sustain the dividend beyond 2017 if desired.
- UBS is only one of a mixed bag of analyst notes on HP today, as Scotia Howard Weil downgrades shares to Sector Perform and Goldman Sachs cuts its price target to $58 from $60, while Cowen, Susquehanna and Stephens join UBS in raising their price targets.
- Now read Helmerich & Payne: All you need to know about Q2