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eResearch places "speculative buy" and $1.90 price target on Leader Energy Services
UPFRONT
The oil price is up. Drilling activity is up. Oilfield services business is up. Industry fundamentals are extremely strong for well-stimulation services companies like Leader Energy Services (CVE:LEA).
The strong recovery in drilling activity in western Canada has allowed the Company not only to expand its fleet size, but also to raise its prices. We anticipate these strong industry fundamentals will continue at least for the next two years. This is captured in our estimates for the Company’s 2011 and 2012 financial results.
We see Leader Energy as a growth story. This provides the perfect back-drop for a scenario of increasing investor interest and a concomitant rising share price.
RECOMMENDATION
We recommend Leader Energy Services Ltd. (“Leader Energy” or the “Company”) as a Speculative Buy for risk-tolerant investors. The recent pull-back represents a buying opportunity. Our 12-month Target Price is $1.90 per share.
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