Dril-Quip: Ready For Liftoff

Summary

  • Dril-Quip, Inc. is a company focused on complementary operations and sales items in deepwater, carbon capture, and offshore wind farms.
  • The company's stock is at a recent low after missing on the bottom line in the recent quarter.
  • Dril-Quip has a long runway for growth and may be a buy at current levels, especially if there is a major upcycle in offshore operations that we anticipate.
  • We are calling a buy on Dril-Quip, Inc. at current levels for risk-tolerant investors.

CHBD

Introduction

We haven't written up Dril-Quip, Inc. (NYSE:DRQ) previously, and that's a regrettable oversight on our part. It's a company with which I used to be very familiar due to their focus on deepwater connectors and liner hangers...the bits

DRQ price chart (Seeking Alpha)

The thesis for DRQ

DRQ Wellhead connector (DRQ)

DRQ's Q3 2023 and guidance

Guidance for Q4

Risks to the thesis

Your takeaway

Dril-Quip is set up to enter 2024 with a strengthened foundation and ability to capitalize on the growth of a continuing upcycle. While there may be some near-term product mix challenges that we will navigate as our customers refine their drilling schedules, we are confident in our ability to provide long-term profitable return on capital.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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