Diamond Offshore -2.8% as Global Hunter cuts shares to Sell

|About: Diamond Offshore Drilling Inc. (DO)|By:, SA News Editor

Diamond Offshore (DO -2.8%) is downgraded to Sell from Neutral with a $38 target price, down from $61, at Global Hunter, which sees further rig deactivations and declining dayrates for less capable units in 2014.

On top of DO's newbuilds entering into service under difficult market conditions, the firm forecasts reduced demand for deepwater capability and lower dayrates; operators will be forced to settle for shorter contracts.

The firm also expects oversupply to lead to more well-to-well work, which will likely lead to contract gaps and lower earnings quality.