Boart Longyear (BLY) Update

Submitted by Jim Thesiger on 30 May, 2008 - 21:17

Boart Longyear (BLY) has a $2.47 share price target and an Outperform recommendation from Australian stock analyst Macquarie Research Equities.

Boart Longyear (BLY) - Vindication at Last!

Boart Longyear has threatened on many occasions to have a good run up since we first called it at $1.85 on 8th April this year. Back then our call was based on the belief that given the performance of comparable companies offshore, BLY was a potential candidate for revenue and earnings upgrades on the back of the booming performance of the mining products and services industry. Well, it took a couple of weeks longer than anticipated, but today our call was vindicated with BLY issuing upgrades to its revenue and margin guidance for 2008 in advance of its 1H08 results due 30 June 2008.

Source: IRESS Daily

BLY has announced that in the four months to date, the company has continued to experience strong demand for its Products and Drilling services divisions, and see no evidence that problems in the global credit markets are having a significant impact on BLY’s worldwide operations.

BLY has increased guidance for revenue growth to 20-25%, up from previous guidance of 15%, and potentially double our estimates of 11%. MRE anticipates the increase in earnings would be along similar lines.

BLY expects that margins achieved in 2H07 will be achieved over the full year 2008. MRE currently assumes 23% 08 EBITDA vs. 22% in 2H07.

MRE retains an outperform recommendation and $2.47 price target.