Seeking Alpha

U.S. offshore drillers downgraded at BMO

  • BMO Capital downgrades the U.S. offshore drilling group to Underperform from Market Perform, expecting industry earnings to continue to slide due to lack of catalysts.
  • The firm upgrades Baker Hughes (BHI +1.8%) to Outperform and hikes its price target to $65 from $51, believing BHI's North American assumptions are too low given increased fund flows to the OFS sub-segment; Weatherford (WFT +1.7%) also was upgraded.
  • Among several downgrades, the firm cuts Diamond Offshore (DO +0.3%) to Underperform and cuts its price target to $64 from $70, seeing further earnings pressure in Brazil; also lowered were Atwood Oceanics (ATW -3.6%), Ensco (ESV +0.1%), Noble Corp. (NE +0.4%), Seadrill (SDRL -0.2%), Transocean (RIG +0.2%) and Rowan (RDC +0.5%).
Comments (11)
  • grox01
    , contributor
    Comments (647) | Send Message
     
    Wow... go figure!
    Wait a couple of weeks to see the opposite.
    16 Oct 2013, 04:02 PM Reply Like
  • Gary Grant
    , contributor
    Comments (135) | Send Message
     
    I agree with your observation. They are all over the map in their analysis. SDRL continues its long march higher.
    16 Oct 2013, 04:07 PM Reply Like
  • Debutant
    , contributor
    Comments (2183) | Send Message
     
    Kudos to the author for including SDRL (Bermuda-based Norwegian) and ESV (United Kingdom) in what he calls "the U.S. offshore drilling group".
    16 Oct 2013, 04:31 PM Reply Like
  • northern_bald_eagle
    , contributor
    Comments (67) | Send Message
     
    @Debutant,
    As well as NE, RIG and WFT (all in Switzerland, NE moving to UK).
    The others (DO, RDC, BHI and ATW) are all in Houston, TX, according to Yahoo Finance.
    16 Oct 2013, 05:10 PM Reply Like
  • Lenchick
    , contributor
    Comments (69) | Send Message
     
    I guess we know how much weight to put on analysts calculations. They go all over the map, almost seems like they try to push the market in two directions so some reason.
    16 Oct 2013, 04:50 PM Reply Like
  • KenNagle
    , contributor
    Comments (289) | Send Message
     
    At best the analysts are right on thiir predictions about 50%.
    16 Oct 2013, 05:26 PM Reply Like
  • RWMostow
    , contributor
    Comments (1371) | Send Message
     
    Perhaps like the broken clock: Correct twice a day?

     

    -rwm
    16 Oct 2013, 05:52 PM Reply Like
  • WhatdoIknow1
    , contributor
    Comments (660) | Send Message
     
    The problem with offshore drilling is that onshore which is cheaper is on offense now. The several new fields in America and Saudi's latest moves towards new projects to fight their loss of oil market share to American and Canadian fields are probably the reason for this downgrade. On the brighter side WFT an oil field parts supplier is getting interesting.

     

    I have recently acquired a little position in WFT based on the prospects of their turn around.

     

    Long WFT
    16 Oct 2013, 06:03 PM Reply Like
  • donzoamania
    , contributor
    Comments (186) | Send Message
     
    Carl Icahn and Leon cooperman disagree on rig. I'll go with them.
    16 Oct 2013, 09:11 PM Reply Like
  • Pedro de Almeida
    , contributor
    Comments (167) | Send Message
     
    I don't think we should look at these "analyst" statements as being simply dumb and random (being right 2 times a day, as a broken clock).
    Most of them are worse than that:
    They are either 1) deliberate attempts to move (manipulate) the market for a profit or, at best, 2) late reactions to previous price movements (an attempt to justify themselves, and to follow the herd, albeit some distance behind - so as not to left alone with a different position from the majority).
    In any of these cases they present useful information (unlike the broken clock), and they should be regarded as contrarian indicators.
    17 Oct 2013, 04:26 AM Reply Like
  • Lenchick
    , contributor
    Comments (69) | Send Message
     
    Pedro, I think you nailed it on the head! Thanks
    17 Oct 2013, 10:18 PM Reply Like
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