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It's still too early to get involved in offshore drillers, RBC analysts say as they expect the group to continue to underperform through 2017 with the supply overhang requiring years to balance out.
- The firm says drillers will need to continue the current pace of rig retirements and retire an additional ~110 rigs by 2020 to balance the market, another 70 retirements are still needed to balance the floater market, and the jackup market will need ~40 additional retirements over the next four years to reach mid-cycle equilibrium by 2020.
- RBC cuts its price targets for Transocean (NYSE:RIG) to $11 from $14, Diamond Offshore (NYSE:DO) to $23 to $29, Atwood Oceanics (NYSE:ATW) to $11 from $14, Rowan (NYSE:RDC) to $16 from $22, and Noble Corp. (NYSE:NE) to $8 from $11.