An analyst for Jefferies on Thursday upgraded his rating on Newpark Resources Inc. and raised his price targets and earnings estimates for the drilling services company.
Analyst Stephen Gengaro said Newpark is currently undervalued by Wall Street and noted that its various services should be driving profits over the next few years. Newpark provides fluids management, waste disposal, and well site preparation products and services for petroleum drillers.
Gengaro upgraded Newpark to "Buy" from "Hold" and increased his price target to $13 from $8 per share. He said Newpark is in a good position to benefit from a rise in drilling activity, primarily in North America, the Gulf of Mexico and Brazil.
Gengaro also increased his annual earnings estimates for the company to 73 cents per share for 2011 from his previous estimate of 54 cents per share and to 90 cents per share for 2012 from 70 cents per share.
Analysts surveyed by FactSet expect earnings of 65 cents a share, on average, for 2011 and 79 cents a share for 2012.