Last checked at 
(Sharecast News) - Berenberg upgraded Hunting on Thursday to 'buy' from 'hold' as it pointed to an attractive valuation and strong international sales.
The bank, which upped its price target to 345p from 325p, said the pullback in the shares since March is overdone, with the stock now trading on FY 2023/24 EV/EBITDA of 4.4x/4x respectively, well below historical averages.
"This attractive valuation, along with strong international sales and the positive working capital messaging, underpins our upgrade to buy," it said.
Berenberg noted that Hunting released a positive first-half trading update on 6 July, in which it raised its 2023 EBITDA guidance and issued 2024 guidance significantly above consensus.
"Robust sales from its North American segment into South America helped drive the upgrade, along with recent order wins in AsiaPacific (APAC)," it said. "This helps to underpin visibility into 2024 and further builds the backlog, up circa 14% since 2022."
The bank said its downgrade to 'hold' in March was driven by a falling US rig count that has continued to soften, down 99 rigs year-to-date to 680.
"Despite this, the Titan division is expected to report stable operating profits during H1 and the latest version of the company's perforating gun (the H-4) is expected to support revenue and margins when released in H2," it said.
"The company expects its balance sheet to move into a marginal net-cash position by end-2023 as working capital balances begin to unwind as large projects complete."
At 1005 BST, the shares were up 4% at 271p.
