Credit Suisse Analyst is Bullish on Two Engineering and Construction Firms

A Credit Suisse analyst is bullish on two engineering and construction companies, saying the prospects for new oil and natural gas contract awards are improving.

Analyst Jamie Cook called shares of Fluor Corp. and Foster Wheeler AG "top picks" in a note to investors on Wednesday. The companies build infrastructure to ship natural gas, and their shares have been depressed because natural gas prices have been relatively low. Natural gas prices are trading around $4 per 1,000 cubic feet on the New York Mercantile Exchange. That's higher than the same time last year but only about half of what natural gas traded for in 2008.

Cook said prospects for new contract awards and additional backlog for oil and natural gas work "should ramp up in 2011," citing private industry sources. "Areas of optimism include Saudi Arabia, Abu Dhabi, Australia, Brazil, India, China and Iraq, but longer term," Cook said. Cook maintained an "Outperform" rating on Fluor with a $56 price target. He maintained the same rating on Foster Wheeler with a price target of $31. Shares of Fluor fell 9 cents to $48.85 in morning trading. Shares of Foster Wheeler fell 18 cents to $24.22.

From INO.Com/AP

Share

Crude Oil Industry Headlines News

"US Pres. Vows to Break 'Addiction' to Foreign Oil, Increase Domestic Production"
US President Barack Obama spared no time in stepping up to energy issues, posting an energy agenda on the administration's new White House website on the day of his inauguration....Complete Story

"ExxonMobil Notifies ANP of Offshore Brazil Oil Discovery"
The Brazilian unit of global oil titan ExxonMobil notified Brazil's National Petroleum Agency that it has discovered oil in the BM-S-22 offshore block....Complete Story

"Shell UK Extends Alliance Contract with Foster Wheeler for 2 More Years"
Foster Wheeler has been awarded a two-year extension of its existing alliance contract with Shell for the provision of basic design, engineering, procurement and construction management services in the UK....Complete Story

"NPD Grants Drilling Permit to ExxonMobil for Wellbore 15/6-10"
The Norwegian Petroleum Directorate has granted ExxonMobil E&P Norway a drilling permit for wellbore 15/6-10, which will be drilled from the Bredford Dolphin semisub....Complete Story