UPDATE: BMO Capital Downgrades Atwood Oceanics (ATW) to Underperform

October 17, 2016 6:50 AM EDT
Get Alerts ATW Hot Sheet
Price: $8.67 --0%

Rating Summary:
    11 Buy, 14 Hold, 5 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 10 | Down: 16 | New: 25
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(Updated - October 17, 2016 9:07 AM EDT)

BMO Capital downgraded Atwood Oceanics (NYSE: ATW) from Market Perform to Underperform with a price target of $7.00 (from $8.00).

Analyst Daniel J. Boyd summarized the downgrade in a note, writing, "Our stress test suggests that ATW is most at risk of needing to raise capital. We see liquidity risk in 2Q18 unless ATW is able to defer $400mn of payments related to two uncontracted UDW rigs, in which case the risk is pushed to 2Q19. Net-debt/2018E EBITDA is 9x and current liquidity is $715mn but we view effective liquidity as $290mn. ATW’s balance sheet concerns are not new (40% of float is short) but the stock has been 'squeezed' 26% higher since the OPEC announcement and ATW is now the best performing peer YTD. But $50-55 oil is not enough for the deepwater rig market, and even if oil trades above $60, we think a recovery would be gradual, especially with 32 UDW rigs currently idle."

For an analyst ratings summary and ratings history on Atwood Oceanics click here. For more ratings news on Atwood Oceanics click here.

Shares of Atwood Oceanics closed at $9.10 yesterday.

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