buy rating

i read this broker report this morning.

Boart Longyear Limited (BLY ? A$4.35), Buy
Positive momentum continues
􀂃 BLY provided an update to the market, including yet another upgrade to FY10 revenue and operating earnings (EBITDA)
guidance.
􀂃 Operating environment conducive to earnings growth ? BLY upgraded FY10 guidance by 5.8% at the revenue level (from
US$1,370m to US$1,450m) and 7.3% at the operating earnings level (from US$205m to US$220m). This implies full year
EBITDA margins of ~15.2%, broadly in line with previous guidance. Management attributed the company?s improving
earnings performance to modest price increases, increasing utilisation rates (currently ~75%), and strong demand for BLY's
new products, with "?2011 contract planning in Drilling Services?showing increased demand and positive pricing trends."
􀂃 Positive momentum looks likely to continue ? MD Craig Kipp provided some positive commentary regarding the remainder of
FY10, stating that, "?we continue to see positive pricing momentum, increasing backlog for manufactured products and
growing inquiries for rig availability." In line with commentary from peers, MD Kipp pointed towards the intention of global
resource companies to increase capex in 2011 as support for current trends.
􀂃 2011 shaping up to be a good year ? This market update from BLY, and recent commentary from peers, suggests that the
cycle is currently moving in favour of BLY and the international drilling space in general. With positive momentum likely to be
supported by increased exploration activity from resource companies, BLY's utilisation rates should continue to improve
which, in turn, should provide a more favourable pricing environment.
􀂃 Our earnings revisions ? We have revised our earnings estimates following BLY's market update. The net change to our
earnings estimates are upgrades of 14%, 11%, and 10% for FY10, FY11 and FY12, respectively.
􀂃 We retain our Buy recommendation ? We believe BLY is well positioned to leverage the attractive cyclical thematic around
global exploration expenditure. We see significant operational leverage in this business in an improving demand
environment, and with a conservatively geared balance sheet, BLY is well poised to take advantage of attractive organic or
acquisitive growth opportunities as they present.