J.P. Morgan Reiterates a Hold Rating on Frank’s International

By Austin Angelo

In a report released today, Sean Meakim from J.P. Morgan reiterated a Hold rating on Frank’s International (NYSE: FI), with a price target of $10. The company’s shares opened today at $10.95, close to its 52-week low of $10.47.

Meakim commented:

“After a brutal 2Q16 reset expectations for FI shares, the company delivered an operating beat in 3Q with improved margins despite top line down 9% q/q. Cost cuts are finally helping and FI is working on another $40mm (set to help 2017), mostly related to its global footprint. Deepwater work is still rolling off and weighing on the GOM and West Africa, a trend we expect to continue into next year. However, signs of Franks’ efforts to gain share in underrepresented markets are also materializing (bringing ~$5mm of new business in 3Q). The Blackhawk deal closed Nov. 1 and will add EBITDA in 4Q (~$2mm), though we expect the bulk of growth in late 2018 and beyond. In sum, we believe the company is taking reasonable steps to improve its lot in an otherwise challenging environment. The shares showed a bit of skepticism yesterday (-1% v. OSX +1%), but in our view mostly already reflect the long path to recovery for offshore services.”

According to TipRanks.com, Meakim is a 4-star analyst with an average return of 4.1% and a 51.1% success rate. Meakim covers the Basic Materials sector, focusing on stocks such as Diamond Offshore Drilling, Oceaneering International, and C&J Energy Services.

Currently, the analyst consensus on Frank’s International is Moderate Sell and the average price target is $11.67, representing a 6.6% upside.

In a report issued on November 2, Morgan Stanley also downgraded the stock to Hold with a $14 price target.

The company has a one year high of $17.73 and a one year low of $10.47. Currently, Frank’s International has an average volume of 753.6K.

Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of FI in relation to earlier this year.

Frank’s International NV engages in the provision of tubular services to oil and gas industries. It operates through the following segments: International Services, U.S. Services, and Tubular Sales. The International Services segment provides tubular services in international offshore markets and in several onshore international regions. The U.S. Services segment offers tubular running services in almost all active onshore oil and gas drilling regions in the Unites States. The Tubular Sales segment designs, manufactures, and distributes large OD pipe, connectors, and casing attachments as well as sells large OD pipe originally manufactured by various pipe mills. The company was founded by Frank Mosing in 1938 and is headquartered in Den Helder, Netherlands.^