Offshore Drillers’ Upgrades and Downgrades
Offshore Drillers' Upgrades and New Crude Oil Price Forecasts
Upgrades and downgrades
Wall Street analysts have recently upgraded and downgraded several offshore drilling (OIH) companies. Below is a list of upgrades and downgrades from March and April 2016.
Upgrades
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Swedbank upgraded Rowan Companies (RDC) from “reduce” to “neutral” but reduced the target price from $19 to $16.
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Transocean (RIG) was upgraded from “hold” to “buy” by Pareto Securities.
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Goldman Sachs upgraded Diamond Offshore Drilling (DO) from “sell” to “neutral” and raised the target price from $18 to $24.
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Ensco (ESV) was upgraded from “sell” to “hold” by DNB Bank. Also, the bank increased its target price from $8 to $10. Morgan Stanley also upgraded Ensco. It upgraded it from “underweight” to “equalweight” and increased its target price from $10 to $14.
Downgrades
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Pacific Drilling (PACD) was downgraded by Barclays from “equalweight” to “underweight.” It maintained its target price of $0.50.
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Barclays also downgraded Atwood Oceanics (ATW) from “equalweight“ to “underweight.” ATW was also downgraded by Goldman Sachs from “neutral” to “sell/cautious.”
It’s important to note that analysts’ estimates generally lag price movements. We see upgrades coming when stocks have already risen. Similarly, they come when a company’s stock has already fallen. However, changes in analysts’ estimates are a key driver of short-term price movements. Investors should keep track of changes in analysts’ estimates, as they provide insight into what the markets are expecting from a company.
For more on this sector, read Offshore Drillers with the Most ‘Buy ’ Recommendations .
Series overview
In this series, we’ll analyze indicators that you can track to get a sense of the offshore industry’s direction. We’ll see if the offshore rig count has improved or further deteriorated and what it means to the offshore drilling industry. We’ll also analyze oil price forecasts and see if they give any ray of hope to offshore drilling investors.
Browse this series on Market Realist: