Raymond James upgraded NS Group (NSS) to strong buy from market perform on valuation.
Analyst Marshall Adkins says since his downgrade on May 10, the company's stock has fallen about 20%. In particular, he thinks increases in domestic and international drilling activity will result in much higher utilization and pricing earnings for NSS over at least the next 18 months.
He sees a $0.80 2002 loss per share, and $1.00 2003 EPS. Based on a discounted cash flow analysis for the company, he's looking at histroic trading multiples of 10-15 times EPS for this group. He set a $12 price target, which is 12 times his 2003 EPS estimate.