Wells Fargo Downgrades Diamond Offshore (DO) to Market Perform

January 24, 2014 8:11 AM EST
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Price: $18.14 +1.00%

Rating Summary:
    7 Buy, 24 Hold, 7 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Wells Fargo downgraded Diamond Offshore (NYSE: DO) from Outperform to Market Perform with a price target of $54-$56 (from $70-$72).

Analyst Matthew D. Conlan said, "We are downgrading DO to Market Perform and lowering earnings estimates and our valuation range. We have factored in lower utilization and rates for DO's older floaters, including the modeled stacking of a few rigs (Saratoga, Lexington), and vaguely dispersed downtime for other mid-water rigs. We are decreasing our valuation range to $54-$56 from $70-$72, representing EBITDA multiples of roughly 6.6-6.8x 2014E EBITDA and roughly 5.5x 2015E EBITDA, including an estimated $1.5B of net debt increase DO will have to incur during 2014 to complete its construction program."

For an analyst ratings summary and ratings history on Diamond Offshore click here. For more ratings news on Diamond Offshore click here.

Shares of Diamond Offshore closed at $51.88 yesterday.

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