Diamond Offshore raised at Morgan Stanley as floater availability has peaked

Diamond Offshore (DO +1%) is upgraded to Equal Weight from Underweight with a $57 price target, up from $47.50, at Morgan Stanley, which says earnings risk has largely played out and shares have an attractive yield.

The cycle is turning and floater availability has peaked, the firm believes, expecting trading to be driven increasingly by the reduction of floater availability through a pickup in fixtures rather than the confirmation of negative data points on dayrates.

Stanley sees negative sentiment on the offshore drillers group reversing to the extent that ballooning floater availability is absorbed from upcoming contract announcements.

Also: ATW +1.4%, HERO +1%, NE +0.8%, ESV +0.8%, RDC +0.5%, RIG +0.4%.

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Comments (8)
  • phxcrane
    , contributor
    Comments (763) | Send Message
    Translation. Morgan Stanley and their clients have now bought enough off shore driller shares to once again recommend them.
    29 May 2014, 11:42 AM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3736) | Send Message
    "ballooning floater availability" was absorbed just as companies guided. There wasn't any oversupply... just "more" supply. The same BS was pulled on Micron, about worries of oversupply... now reality is setting in.


    Thanks for the buying opportunity, you manipulative crooks! From $48 to $33 in the case of SDRL - analysts and ratings firms have a lot of weight!


    Oh look, another HIMX downgrade.


    29 May 2014, 11:46 AM Reply Like
  • rvshaw
    , contributor
    Comments (117) | Send Message
    This is a capital-intensive industry, with long lead times. You don't go from glut to in-balance supply in 4-6 months. The analysts screamed "the sky is falling", but won't admit they were wrong.
    29 May 2014, 12:10 PM Reply Like
  • Debutant
    , contributor
    Comments (2929) | Send Message
    The analysts in the market and their Mini-Me's here on SA are like the boy who cried "wolf". This time their game was much too obvious, way too easy to see.


    29 May 2014, 12:32 PM Reply Like
  • rvshaw
    , contributor
    Comments (117) | Send Message
    I'm just glad I had the courage to stay on the ship, rather than jump off. In fact, I loaded up at $34. Wish I had held out for $33, but hey, when it goes back to mid-40's, I'll be smiling.
    29 May 2014, 01:17 PM Reply Like
  • cyrano13
    , contributor
    Comments (186) | Send Message
    DO has the largest institutional holding of the major drillers, and the oldest rigs.
    ESV has the lowest debt. NE, SDRL, ESV have newer rigs. RIG has Ichan & Cooperman. MS analysts are a joke.
    29 May 2014, 02:07 PM Reply Like
  • LMinAppleton
    , contributor
    Comments (137) | Send Message
    cyrano13: And I'm laughing all the way to the bank. :-)
    29 May 2014, 02:30 PM Reply Like
  • combatcorpsmanVN
    , contributor
    Comments (1362) | Send Message
    This is just another example of the "normal" WS game. First, make up as many reasons as you think will be swallowed by the suckers to get them to sell out of off-shore and buy onshore drillers. Than when the dust has settled, make up some story that will get the suckers to abandon on-shore and move back to off-shore drillers. This scenario has been used for decades and must work since WS never quits using it.


    There is money to be made by doing the exact opposite of what WS, that includes the marketing team at Motley Fool, are encouraging you to do -- you'll make some serious monetary gains. I like to use HAL and BHI two years ago as glaring examples of what can happen by ignoring WS, Motley Fool, and the clowns on CNBC.


    Good Luck to the RIG longs.
    2 Jun 2014, 12:24 PM Reply Like
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