SBO confirmed at BUY, TP EUR 36.0 - Fully equipped to withstand another storm
We confirm our BUY recommendation for the stock as we strongly believe that the proven track record of the management to successfully navigate through previous market downturns coupled with a sound balance sheet should enable the company to take full advantage of the next markets upturn. Moreover, with ca. EUR 300 mn cash in its accounts, which includes the recently raised debt of EUR 78 mn (via issuance of promissory notes or Schuldscheine), SBO is also prepared for another acquisition should the right opportunity arise. Although we have adjusted downwards our 2020-22e top-line projections to reflect the stronger than previously expected negative impact of weaker oil demand on capex spending of crude producers, our new 12-month target price of EUR 36.0 (ca. 15% below the old TP) would still imply a hefty upside for the stock.Schoeller-Bleckmann Oilfield Equipment is engaged as a producer of high precision components and a supplier of oilfield equipment for the oilfield service industry. Co. focuses on non-magnetic drillstring components (non-magnetic drill collars) and downhole tools for drilling and completing directional and horizontal wells. The High Precision Components segment consists of the manufacturing of MWD (Measuring While Drilling) and LWD (Logging While Drilling) precision drillstring components. The Oilfield Equipment segment comprises production and distribution of non-magnetic drill collars, drilling motors and tools for downhole circulation applications, repair and maintenance services.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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