Zacks Investment Research downgraded shares of National Oilwell Varco, Inc. (NOV) from NEUTRAL to UNDERPERFORM on February 11, 2013, with a target price of $63.00.
Despite National Oilwell Varco's fourth quarter profit beat, we are recalibrating our investment thesis on the oilfield services behemoth to Underperform from Neutral. With markets remaining competitive and pricing likely to be soft, the company s margins are expected to suffer in the next few quarters. The recent weakness in the North American onshore drilling environment has also been a negative. Furthermore, we expect National Oilwell Varco shares to remain depressed until it fully works its way through the Robbins & Myers acquisition. Considering these headwinds, we expect National Oilwell Varco to perform below the industry, which gives investors little reason to hold the stock.
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