Global Hunter Securities Downgrades Rowan Companies (RDC) to Neutral; Downtime a Difficult Hurdle

August 3, 2012 8:51 AM EDT
Get Alerts RDC Hot Sheet
Price: $19.37 -0.72%

Rating Summary:
    17 Buy, 21 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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Global Hunter Securities downgraded Rowan Companies (NYSE: RDC) from Buy to Neutral with a price target of $35.00 (from $38.00).

Analyst, Brian Uhlmer, said, "Continued estimate reductions due to increased shipyard time have been a recurring trend and we view its estimate that just 8% of its total rig days in 2013 will be subject to downtime as a difficult hurdle to achieve. While we understand that 2012 is a transition year with RDC placing several rigs through substantial upgrades and transit time, we view the upside to 2013 estimates to be less than its peers as 67% of RDC’s available days are already booked, with much of its availability weighted toward less-meaningful assets. The stock also trades at a 17% and 12% premium to its peer group’s respective 2012 and 2013 P/E and a 51% and 23% premium to the average of our favorites in the group – Atwood (NYSE: ATW), Ensco (NYSE: ESV) and Noble (NYSE: NE). With fewer contract catalysts, likely more downside risk to estimates than peers and a premium valuation, we find it hard to justify our former Buy rating."

For an analyst ratings summary and ratings history on Rowan Companies click here. For more ratings news on Rowan Companies click here.

Shares of Rowan Companies closed at $34.84 yesterday.

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