Jefferies Maintains Buy, But Lowers PT On Dril-Quip (DRQ)

Jefferies & Company, Inc. is out with a note, where it maintains its “buy” rating on shares of Dril-Quip DRQ; it has also lowered its price target to $60.00 from $62.00. DRQ recently reported 2Q10 operating EPS of $0.70 which slightly missed analyst ($0.74) and consensus ($0.71) estimates. The analysts at Jefferies noted, “Robust gross margins offset a slight revenue shortfall leading to a gross margin beat, but a higher SG&A and a higher tax rate weighed on EPS.” Jefferies also added, “We are reducing our 2010-11 EPS estimates to $2.88 and $3.00 from $3.05 and $3.45, respectively. Our revenue estimates also decline to $568.5 million and $585.6 million from $587.5 million and $646.3 million for 2010 and 2011. The lower 2011 estimate reflects uncertainty around the specific impact of the Gulf drilling ban and we see upside potential near our prior forecast depending on timing of activity increased in the Gulf. “ DRQ is currently trading at $52.83, up 46 cents in morning trade.