Acergy a Buy Up to $10

Our continued Buy recommendation on Acergy S.A. ADRs (ACGY - Analyst Report) reflects the company's strong leverage to the still very favorable outlook for deepwater oilfield activities.

Given the long-term positive fundamentals of crude oil and the long lead times of deepwater projects, we do not expect any meaningful impact on deepwater activity levels from the sharp pullback in commodity prices. Additionally, the sponsors of most of these projects are either the well-capitalized oil majors -- Exxon (XOM - Analyst Report), Chevron (CVX - Analyst Report), BP (BP - Snapshot Report), etc. -- or national oil companies, which are not as exposed to the credit-market turmoil.

We view ACGY ADRs as an attractive vehicle to play this positive outlook for deepwater construction. Our new $10 price objective, reduced from $19 before, represents 2009 P/E and EV/EBITDA multiples of 6.6X and 4X, respectively, still at significant discount to the broad oilfield service market.

Read the full analyst report on ACGY

Read the full analyst report on XOM

Read the full analyst report on CVX