Offshore drillers whacked at Deutsche Bank, several names cut to Sell

|By:, SA News Editor

Deutsche Bank issues a scathing negative call on offshore drillers, believing the market is mistaking a wholesale recapitalization of the offshore rig fleet for a more benign cyclical downturn.

The firm thinks Transocean (NYSE:RIG) and Diamond Offshore (NYSE:DO) will be forced to cut their dividends, downgrading both stocks to Sell from Hold; RIG's target price is cut to a Street-low $27 from $45, while DO is cut to $34 from $60.

Ensco (NYSE:ESV) also is cut to Sell from Hold with a $41 price target from a prior $52; Noble Corp. (NYSE:NE) is downgraded to Hold from Buy with a $28 price target, down from $50.

RIG -2.4%, DO -1%, ESV -1.3%, NE -12.5% premarket.