Salomon Downgrades National-Oilwell to 'Neutral'

Analyst Geoff Kieburtz downgraded key drillers due to a sharp rise in valuations, despite weakness in fundamentals

Salomon Smith Barney downgraded National-Oilwell (NOI ) to neutral from buy as part of a downgrade of oil drillers and service companies.

Analyst Geoff Kieburtz says due to sharper-than-expected Western Hemisphere rig count declines and poor North Sea weather conditions, he believes first quarter earnings per share estimates for oilfield services companies will be lower than he initially expected. He doesn't believe the first quarter shortfall will be made up during the balance of the year.

Due to a sharp rise in valuations despite continued weakness in fundamentals, he downgraded National-Oilwell, Baker Hughes (BHI ), Helmerich & Payne (HP ), Hyril Co. (HYDL ), Nabors Industries (NBR ), Oceaneering International (OII ), Patterson-UTI (PTEN ), Smith International (SII ), Schlumberger (SLB ), Universal Compression Holdings (UCO ), and Varco International (VRC ).

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