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Global Hunter Securities Downgrades Vantage Drilling Co (VTG) to Neutral

July 30, 2014 10:15 AM EDT
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Price: $0.05 --0%

Rating Summary:
    1 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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Global Hunter Securities downgraded Vantage Drilling Co (NYSE: VTG) from Buy to Neutral with a price target of $2.10 (from $2.55).

Analyst Mark Brown said, "We believe the fleet is well positioned during what we believe will be a trough period over the next four to six quarters. VTG has three drillships fully contracted during this time, and the Cobalt Explorer newbuild drillship, which is uncontracted, has top-rate specs (2.5 million lbs. hookload, two seven-ram BOPs) so will likely find a bridge contract if necessary before the scheduled delivery in August 2015. VTG repaid $30MM of debt in Q1 and intends to average quarterly repayments of at least $50MM going forward (we have modeled $60MM in Q2, $50MM in both Q3 and Q4). Relative to the 2014 debt reduction goal of $175MM, we believe $190MM and potentially more is possible if the $65MM refund guarantee from the STX termination of the Palladium rig is received. We assign a Neutral rating (vs. Buy previously) on the stock and lower our price target to $2.10 (from $2.55 previously) based on a 7.0x multiple on our 2015."

EBITDA estimate of $500MM. We forecast EPS growing from $0.05 in 2013 to $0.30 in 2014 and to $0.32 in 2015.

For an analyst ratings summary and ratings history on Vantage Drilling Co click here. For more ratings news on Vantage Drilling Co click here.

Shares of Vantage Drilling Co closed at $1.88 yesterday.



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