Zacks Investment Research downgraded shares of Dril-Quip Inc (DRQ) from OUTPERFORM to NEUTRAL on March 25, 2014, with a target price of $112.00.
Dril-Quip Inc. manufactures highly engineered offshore drilling and production equipment. The company reported higher earnings and revenue in the fourth quarter, fueled by improved product and service revenues as demand for offshore equipment grew. Dril-Quip's results are heavily levered with continued strength in global deepwater drilling markets. However, Dril-Quip remains exposed to the highly volatile oil and gas sector fundamentals. We also remain concerned about company-specific risks, which include new product growth challenges and potential backlog losses. Additionally, any delay in the execution of contracts might also hinder the growth prospect of Dril-Quip. This is reflected in our Neutral recommendation on the stock with a target price of $112.00.
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