Texas Capital Securities reiterated its Buy rating on Archrock (NYSE: AROC) and kept its price target at $41. The shares were cited at $30.34 in the report, which described the company’s valuation as attractive.
The firm pointed to Archrock’s latest quarterly results, including adjusted EBITDA above expectations and sequential improvement in revenue per horsepower. Contract operations adjusted gross margin also improved from the previous quarter. Management reported its highest quarterly bookings since the second quarter of 2023, which Texas Capital said reflected continued customer demand for compression.
The report also identified weaker-than-expected implied EBITDA guidance for the fourth quarter of 2026 as a negative, along with results from Archrock’s AMS business that fell short of expectations.
In other recent results cited in the report, Archrock’s second-quarter 2026 adjusted earnings were $0.38 per share on revenue of $371.2 million, below analyst expectations of $0.46 per share and $393.34 million in revenue. The company reported adjusted EBITDA of $213 million and said contract operations margins remained above 70% for a seventh consecutive quarter. It also narrowed its full-year adjusted EBITDA guidance to $865 million to $885 million.
Sources: Investing.com News.