Berenberg raises target price on Hunting
Analysts at Berenberg raised their target price on oil and gas industry supplier Hunting from 275.0p to 325.0p on Friday, stating momentum was building into an improving outlook.
Berenberg said Hunting had delivered "strong" interim results on 25 August that were broadly in line with consensus for revenue but also included "a strong beat" for underlying earnings at $21.0m versus guidance of $16.0m-18.0m.
In addition to this, Berenberg noted that Hunting's management expects improved delivery into the second half and 2023, supported by high commodity prices and a growing backlog. It also added that further margin growth was likely through operational gearing as utilisation levels continue to increase.
"Gradually increasing US activity levels, combined with the potential for an offshore and international recovery, leave the stock attractively valued, in our view," said the German bank, which also reiterated its 'buy' rating on the stock.
"Momentum has clearly accelerated during the first half of the year, with Q2 EBITDA more than double Q1 levels at circa $13.9m, driven by the Hunting Titan segment. Further improvements to profitability during H2 are expected due to an order book which nearly doubled from $215.0m at year-end to circa $400.0m at the end of August. We expect further margin growth to materialise into 2023, mainly driven by improved utilisation due to the high level of operational gearing."
Reporting by Iain Gilbert at Sharecast.com