Dahlman Rose Reiterates Hold Rating on Nabors Industries (NBR)

Dahlman Rose & Co. is out with a research report this afternoon, where it reiterates its Hold rating on Nabors Industries Inc. NBR; it did not provide a price target on the stock. The Dahlman analysts cited the company’s most recent earnings report, which were mixed relative to the consensus estimates and Dahlman’s estimates. The analysts noted that, although management was more bullish on near to medium term prospects than last quarter, “guidance toward higher costs, more competitive international markets, and a flattish/sluggish earnings progression in the near term may overhang the shares.” The analysts are lowering their estimates to reflect higher costs and a lower international forecast. They said, “Guidance for International EBIT of $260MM for 2010, a $25MM negative impact from the drilling moratorium for Offshore in 2H10, and $12MM of EBIT from Canada in 2010, falls below our original forecast. Higher cost assumptions and a lower run rate into 2011 leads us to reduce our numbers moving forward. We are lowering our EPS estimate for 2010 to $0.89 from $1.15, for 2011 to $1.68 from $1.92, and for 2012 to $2.13 from $2.41.”