Evercore ISI Downgrades North Atlantic Drilling (NADL) to Sell

Evercore ISI downgraded North Atlantic Drilling (NYSE: NADL) from Hold to Sell with a price target of $1.40.

Analyst Jame West comments, "The supply-driven market imbalance in the offshore drilling segment of the group has been amplified by the drop in oil prices and has moved the industry into a full-blown cyclical downturn - one that may take years to work through. While we expect Brent prices to recover to $70/Bbl by year end, we do not expect the offshore-related rig market to bounce back in the next year or two. Instead, we look for the market to potentially stabilize in 2017. While we maintain a few Buy rated stocks during this difficult period for the industry, we view these as better positioned companies in a bad neighborhood. Unfortunately the rate of deterioration has impacted all companies and more is to come. We believe this subsector should continue to be avoided. With rig attrition still limited, rig-on-rig competition increasing (sometimes rigs owned by the same driller), and potentially one-quarter of the offshore rig fleet available in 2015, conditions are set to deteriorate significantly in the near term. We are moving most of our Hold rated stocks to Sells. Our Sell rated names remain Sells. Our Buy rated stocks should be considered longs in a pair trading environment rather than outright longs."

For an analyst ratings summary and ratings history on North Atlantic Drilling click here. For more ratings news on North Atlantic Drilling click here.

Shares of North Atlantic Drilling closed at $1.56 yesterday.

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