Pritchard Capital Partners Reaffirms FMC Technologies’ “Top Pick” Rating (FTI, RDS.A, STO)

Pritchard Capital Partners LLC is out with a research note this morning, where their analysts reiterate FMC Technologies’ FTI “Top Pick” status; they have an $80 price target on the stock. Pritchard analysts said, “All is well at FTI and we are confident in our above consensus 2010 and 2011 EPS estimates of $3.08 and $3.40 (consensus $2.88 and $3.16) and expectation that the stock will regain its premium multiple, hitting our $80 price target (~45% upside) in the next 12-mos.” Key takeaways from their meeting with management include: (1) “Gulf of Mexico (GOM) moratorium has minimal impact, as expected. FTI has yet to slow down work on existing projects, has begun to shift its roughly 120 service technicians working in the GOM to different roles, expects projects like Royal Dutch Shell’s RDS Perdido to continue as planned, and is working two-shifts plus weekends in its Houston facilities. Despite the moratorium, we still forecast FTI will hit its 2010 order expectations.” (2) “International markets picking up; expect numerous small call-off awards. Yesterday FTI announced it won a $70MM award from Statoil ASA STO for its Pan Pandora Field in the Norwegian North Sea. The company believes STO has 10-15 call-off awards, expects RDS-A is close to awarding a subsea project offshore Nigeria and potential work offshore Malaysia, and that customers with frame agreements will continue to move forward with existing project expansion after reducing capex in 2009.” (3) “Balance sheet focus on share repurchases and core businesses. Do not expect FTI to branch off into the BOP or liner hanger business, but rather continue to utilize its balance sheet for small bolt-on acquisitions and share repurchases (at the quarter end FTI had approximately 4.5MM shares remaining on its repurchase program), which sends our 2011 EPS estimate to $3.40, up from $3.35 and above consensus of $3.16.”