Thu, Aug. 13, 7:27 PM
- Oil companies are bracing for "lower for longer” prices as a global supply glut persists, dragging U.S. crude to the lowest close since March 2009 at just above $42/bbl.
- More capitulation notes are out; Oppenheimer's Fadel Gheit wrote today that the "new normal" for oil in a recovery would be $65-$75, and that "the vast majority of oil companies are living beyond their means, with operating cash flow falling short of capital investments and dividend... Unless oil prices rebound significantly above future strip prices, oil stocks could sink further, as takeover premiums shrink with potential sellers significantly outnumbering potential buyers."
- The world’s biggest producers will need to trim investments by another $26B, Jefferies believes; capital spending will have to fall 10% next year, according to Banco Santander.
- CNBC's Bob Pisani says when energy stocks staged a brief bounce recently, investors repeated a frequent mistake: They tried to buy oil stocks ahead of a recovery in crude oil, instead of the other way around.
- The result today was heavy losses for many of the sector's big names: CHK -6.6%, MRO -5.4%, COP -2.8%, APC -2.4%, SWN -4.2%, RRC -4.4%, RIG -6.5%, DVN -3.9%, APA -2.6%, BHI -2.9%, CAM -3.5%.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXI, FIF, PXJ, NDP, RYE, FXN, DDG
Mon, Jul. 27, 3:39 PM
- Cameron (CAM -0.8%) and Oceaneering (OII -1.9%) are upgraded to Buy from Accumulate, with respective $58 and $60 price targets, at Global Hunter, even as it downgrades land-based drilling services provider Patterson-UTI.
- The firm says its CAM upgrade is based on the company's margin resilience, boosting leadership and leverage to an eventual North American recovery, and expects margins to continue to hold up relatively well in its largest subsea and drilling segments due to CAM's focus on improving execution even prior to the downturn.
- OII shares have shed more than 30% since early April as WTI has drifted below $50/bbl, a level the firm believes is not sustainable; OII eventually should rally with oil prices, the firm says, preferring to be buyers when the screen is red.
Thu, Jul. 23, 7:43 AM
Wed, Jul. 22, 5:30 PM
- ABB, ABC, ADS, AEP, ALK, AMAG, AOS, ASPS, BCC, BHE, BKU, BMS, BMY, BSX, CAB, CAM, CAT, CELG, CFX, CLFD, CMCSA, CMS, COR, CS, CSL, CY, DAN, DFRG, DGX, DHR, DLX, DNKN, DOW, DPS, DST, EQM, EQT, FAF, FCX, FIS, FNB, GM, GMT, GNTX, GPI, GPK, HBAN, HERO, HUB.B, IMAX, IQNT, IVC, JNS, KKR, KMB, LAZ, LLY, LUV, MAC, MCD, MHO, MINI, MJN, MMM, MNRO, MRGE, NDAQ, NEO, NUE, NWE, ORI, PDS, PENN, PHM, PRLB, PTEN, QSII, R, RCI, RS, RTN, SCHL, SFE, SHPG, SNA, SQNS, STC, STM, SYNT, TCB, TROW, UA, UAL, UNP, USG, UTEK, VAC, VRX, WAB, WCC, WIT, WM, WRLD, XRS
Mon, Jul. 13, 8:47 AM
- Norwegian offshore engineer Subsea 7 (OTCPK:SUBCY) says it is forming an alliance with Cameron (NYSE:CAM) and Schlumberger (NYSE:SLB) JV OneSubsea to collaborate on selected projects, focussing on subsea production systems and subsea umbilicals, risers and flowlines system solutions.
- Subsea 7 says the alliance will bring together its experience and technology in seabed to surface engineering, construction and life-of-field services with OneSubsea's unique reservoir expertise and state-of-the-art subsea production and processing systems technologies.
Fri, Jul. 10, 3:41 PM
- Cameron (CAM +1%) is upgraded to Outperform from Sector Perform with a $65 price target, raised from $55, at RBC, which sees upside to consensus 2016-17 expectations as the company's diversified business mix is performing better than the market expected.
- RBC sees the strong Surface and Subsea businesses allowing CAM to generate healthy free cash flow through 2017; on the order front, the firm thinks Q1 will be a bottom in total orders and historically the stock trades with order trends.
- RBC expects to see tangible integrated OneSubsea awards in H2 and ultimately still believes the offering will increase recovery rates and lead to higher margins for CAM.
Tue, Jul. 7, 3:18 PM
- Schlumberger (SLB +0.6%) is upgraded to Focus Stock from Sector Outperform, with a $100 price target, at Howard Weil, which says the combination of SLB's global scale, technology and transformational initiatives that were ongoing prior to the downturn provides a level of forward clarity that is unique among oil service companies.
- While SLB is typically viewed as a defensive stock in times of turmoil in the oilfield services sector, shares have underperformed its large-cap diversified peers YTD, which the firm says presents a tremendous opportunity since SLB management has a differentiated story that will become more evident as the upcoming conference call season unfolds.
- Howard Weil also upgrades Cameron (CAM +2.5%) to Sector Outperform from Sector Perform with a $61 price target; given CAM's robust backlog carried into the start of the year, the firm believes CAM has a fair amount of earnings visibility this year and finds management's conviction level of its shorter-cycle revenue businesses higher despite a dismal U.S. onshore rig count.
Mon, Jun. 29, 8:15 PM
- Cameron (NYSE:CAM) stands out as Barclays' Top Pick in the energy sector, as the firm highlights "resilient results expected from improved execution and manufacturing flexibility, while also being well positioned for the eventual recoveries in each of its end markets."
- Valero Energy (NYSE:VLO) remains Barclays' favorite name among refiners, due mostly to the new management’s emphasis on growing value for shareholders; Suncor (NYSE:SU) and Vermilion Energy (NYSE:VET) also rank among the firm's favorites.
- Among regulated utilities, NextEra Energy (NYSE:NEE) is one of the highest quality names, with 5%-7% targeted earnings growth generated from continued investment in its Florida Power & Light regulated entity.
- In precious metals, Royal Gold (NASDAQ:RGLD) is Top Pick; Barclays prefers gold royalty companies over gold producers as they have wider margins and limited exposure to rising operating and capital costs while their diversified portfolios limit political risk, and RGLD is the best of the group.
Tue, Jun. 2, 4:57 PM
- Chevron (NYSE:CVX) pays a ~$940K fine for a fatal 2014 explosion at one its Pennsylvania gas wells that state regulators say may be the largest amount paid for a single incident.
- The state's Department of Environmental Regulation says CVX supervisors at the well site were preoccupied with paperwork and did not properly oversee the work done by Cameron International (NYSE:CAM) contractors, one of whom was killed when natural gas escaping from a well exploded.
- CVX paid a reported $5M to the deceased man's family to settle their wrongful death lawsuit.
Thu, May 28, 5:39 PM
- OneSubsea, a joint venture between Cameron (NYSE:CAM) and Schlumberger (NYSE:SLB), is awarded a $330M contract to install and service subsea production systems for a natural gas project off the coast of North Africa, at a time when orders for underwater oil field equipment have faded.
- The scope of supply for the 13-well development includes subsea production equipment, tooling, and installation and commissioning services; deliveries are expected to begin in Q3 2016.
- The award is the second part of the project and is the largest contract for work on subsea production systems in North Africa, according to CAM CEO Jack Moore; OneSubsea already was the supplier for the first phase of the offshore project.
Mon, May 11, 3:04 PM
- Screening for the 10 S&P 500 companies which cut their float by the most in 2014, Wallace Witkowski finds just half have seen their stock prices outperform the average over past two years. Six out of ten saw an improvement in adjusted EPS; five out of ten an improvement in EPS.
- ADT Corp. (NYSE:ADT) reduced its share count by 18% - the most in the group - and has seen its stock price fall 16% over the last two years. Next is Cameron International (NYSE:CAM), which cut its float by 16% and saw its stock decline 19%. Mosaic (NYSE:MOS) has bought back 12% of its stock, but is down 30%.
- Success stories include CF Industries (NYSE:CF), cutting stock outstanding by 14% and posting a 62% gain in price. Juniper Networks (NYSE:JNPR) has bought back 10% of the float and is sporting a 57% gain.
- All ten of the companies increased their debt load alongside the buybacks.
- ETFs: PKW, SYLD, FYLD, IPKW, SPYB
Mon, May 11, 7:54 AM
- Cameron (NYSE:CAM) selects Scott Rowe, current President and COO, to take over as the new CEO effective Oct. 5, replacing Jack Moore, who says he will retire on that date.
- Rowe became President/COO last September after climbing through the ranks at CAM since joining the company in 2002.
- Moore, who has led CAM for more than seven years and joined the company in 1999, will continue to serve as Chairman beyond Oct. 5.
Thu, Apr. 23, 7:40 AM
Wed, Apr. 22, 5:30 PM
- ABBV, AEP, ALK, ALXN, ASPS, AVT, BAX, BBT, BCC, BEAV, BHE, BKU, BMS, BTU, CAB, CAM, CAT, CFX, CLFD, CLI, CMS, COL, COR, CSL, DAN, DGX, DHR, DLX, DNKN, DOW, DPS, DPZ, DST, EQM, EQT, ERIC, FAF, FCX, FNB, GM, GMT, GPK, GRA, HP, HSY, HUB.B, IQNT, IR, IVC, JAH, JCI, JNS, KKR, LAZ, LLY, LTM, LUV, MDP, MDSO, MHO, MJN, MMM, MO, MTH, NDAQ, NUE, NVS, NWE, ORI, PENN, PEP, PG, PHM, PII, PNK, PRLB, PTEN, RS, RTIX, RTN, SFE, SNA, SQNS, STC, SUI, SWK, SXC, SYNT, UAL, UNP, USG, UTEK, WBC, WCC, WNS
Fri, Apr. 17, 4:57 PM
- Cameron International (NYSE:CAM) stands to benefit in the short run from well upgrades to meet new safety regulations as well as over the longer term from an expected oil price rebound, according to a Barron's analysis.
- The drilling industry estimates the new rules could cost $880M over a decade, and CAM is seen as a key beneficiary of the spending, adding to an aftermarket business that already brings in a quarter of the company's revenue and has grown at a compounded rate of 15%/year since 2010; aftermarket profit margins are more than double the company-wide average.
- A rising aftermarket business is for now being eclipsed by a near-term plunge in drilling revenue; in 2009, the last time drilling activity fell so sharply, investors paid 17x depressed earnings for CAM, similar to the current valuation, and the stock price then went on to more than double over five years as drilling activity recovered.
Mon, Apr. 13, 11:24 AM
- "No one (including us) has a really good handle on energy industry earnings estimates over the next few years," says J. Marshall Adkins and team at Raymond James, downgrading Cameron International (CAM -1%), Nabors Industries (NBR -0.3%), Schlumberger (SLB -0.8%), FMC Technologies (FTI -1.5%), and Basic Energy Services (BAS -6.6%).
- Nevertheless, Adkins gives it his best shot and his numbers are well below the Street for 2015 and 2016. Then there's valuations, and the recent surge in prices has left them less than compelling.
- Noted is substantial pricing pressur and overcapacity in many business lines, a more prolonged downturn internationally, and offshore activity not expected to see even a moderate uptick for several years.
- Source: Barron's
- Previously: Schlumberger slips as Raymond James heads to the sidelines (April 13)
- Previously: Raymond James throws in the towel on oil services (April 13)
Cameron International Corp is a provider of flow equipment products, systems and services to worldwide oil, gas and process industries. It also works with drilling contractors, oil & gas producers, pipeline operators and refiners.
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