Dahlman Rose Raises Price Target on Dril-Quip

Dahlman Rose has increased its price target on Dril-Quip (NYSE: DRQ) following big 3Q10 backlog growth.

Dril-Quip's backlog increased to $625MM, a 16% sequential increase. This increase was mainly caused by a $100MM offshore production equipment order and the reinstatement of rig equipment backlog from a rig purchased out of bankruptcy.

Dahlman Rose writes, "We are raising our price target to $83 from $75 in order to better discount improving growth prospects for the offshore equipment market, which move the company toward the top of our implied P/E valuation range . Incorporating management's 4Q10 guidance range of $0.64 to $0.74 and 3Q10 results, we are raising our 2010 EPS estimate to $2.87 from $2.85, while adjusting our 2011 EPS to $3.49 from $3.54."

DRQ is trading at $73.61.