Credit Suisse likes Noble Energy, Rowan among offshore drillers

|About: Noble Energy, Inc. (NBL)|By:, SA News Editor

Credit Suisse reviews “beaten, battered and bruised” offshore drillers, noting the sector has continued to disappoint YTD after underperforming by ~15% in 2013.

As lower dayrates and slowing offshore capital spending keeps the drillers "in the penalty box," the firm says stock selection is key in this environment and prefers Noble Energy (NBL +0.4%), which a de-risked NAV of $32, and Rowan (RDC -1.2%), whose premium fleet trades at a discount.

The firm cuts Atwood Oceanics (ATW +0.2%) to Neutral from Outperform, explaining that ATW and Seadrill (SDRL +0.4%) “are playing a different game - paying out all of their cash flow as a dividend and shifting assets to SDLP (financial arbitrage).”