Pritchard Capital Partners Increases Estimates on OYO Geospace (OYOG)

Pritchard Capital Partners LLC is out with a research report this morning, where it reiterates its Buy rating on OYO Geospace OYOG; it has a $70.00 price target on the stock. The PCP analysts cited the company’s recent earnings report, which handily beat estimates, both on the revenue and EPS sides; this was due primarily to the performance of the company’s marine segment. The analysts also noted that margins are being compressed as its traditional seismic business is seeing less than full capacity, though the company has said that quotings have remained high. The PCP analysts raised 2010 EPS estimates from $1.70 to $2.20. As for valuation, they remarked, “Using GSR revenues of $22 million and a trough multiple of 32x, we derive a price target of $70. Based on historical data, we believe that a 32x multiple is not an aggressive multiple. We also consider $22 million of GSR revenues to be on the conservative side of the spectrum, having in mind that OYOG had already reported $18 million of GSR revenues.”