Dover received a slight price-target increase from RBC Capital Markets as the firm said its expectations have increased for the manufacturer of equipment and components to divest part or all of its energy segment. RBC also said it sees oil-services company Halliburton (HAL) as being at the top of the short list of potential suitors given its desire to expand in artificial lift. Shares of Halliburton rose 1.0% to $43.30 in recent pre-market trading.
The new price target from RBC on Dover’s stock is $90 per share, up from $89. In comparison, the stock closed Wednesday’s session at $81.62. RBC maintained its investment rating on the stock at sector perform. In a note to clients, RBC said it now sees a 70% probability Dover will divest all or part of its energy segment in the next 12 months. The firm estimates the segment could go for about $4 billion, unless the bearings-and-compression unit is excluded from the sale, which RBC estimates would lower the potential price tag to about $3.2 billion. RBC noted it expects Dover would retain the oil-related business in its fluids segment.