Saying energy infrastructure will lead the Engineering & Construction sector in 2011, Gleacher & Co. said they're raising their earnings estimates on Fluor (NYSE:FLR), Foster Wheeler (Nasdaq:FWLT), McDermott (NYSE:MDR) and KBR (NYSE:KBR).
Gleacher stated, "In conjunction with rolling out our 2012 EPS estimates, we are increasing our price targets on Fluor to ($67 from $60), Foster Wheeler ($35 from $30), McDermott ($23 from $21) and KBR, Inc. ($33 from $30). We believe the trough in industry backlog is behind us and market conditions are favorable for energy infrastructure equity appreciation.
"In general, we maintain our view that international energy/mining infrastructure companies will drive better investor returns than domestic Federal and energy exposed companies. Gulf Island and B&W are exceptions to our thesis as we believe pure-play Gulf of Mexico fabrication and nuclear will outperform other US
end-markets."
Gleacher has a "Buy" rating on the the stocks mentioned above.
Flour closed Monday at $57.98, gaining $0.39, or 0.68 percent. Foster Wheeler ended the session at $29.11, rising by $0.33, or 1.15 percent. McDermott International closed the day at $18.17, dropping $0.22, or 1.20 percent. KBR ended at $27.68, losing $0.06, or 0.22 percent.
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