Bank of America Merrill Lynch Reiterates Buy On Dril-Quip

Bank of America Merrill Lynch is reiterating its Buy rating and $86 price target on shares of Dril-Quip, Inc. DRQ. In a note to clients, Bank of America Merrill Lynch writes, "We continue to forecast ongoing facilities expansions to increase quarterly earnings power from ~$0.70 per share currently to ~$1.25 per share in 2013. Critically, our recent trip to Brazil validates our view that demand exists to fill the new capacity. Additionally, DRQ is a prime beneficiary of the nascent recovery in Gulf of Mexico activity. Valuation is reasonable to us, trading in-line with the 10-year average forward P/E (21x) and the peers, despite better growth prospects." Shares of DRQ gained 34 cents yesterday to close at $69.86, a gain of 0.5%.