UPDATE: Barclays Upgrades Bristow Group (BRS) to Overweight

(Updated - June 6, 2016 11:42 AM EDT)

Barclays upgraded Bristow Group (NYSE: BRS) from Equalweight to Overweight with a price target of $20. Analyst William Thompson thinks the company can to shore up near-term liquidity.

"The recent credit amendments provide covenant headroom,but BRS's confidence in its liquidity, with no intention to raise equity, has fallen on deaf ears with shares down 48% YTD (vs. +3% OSX) as investors are understandably anxious given near-term cash obligations outweigh liquidity (see Figure 1) and deteriorating EBITDA. We believe BRS's first order of business, before any need to tap the capital markets, is to pursue sale leasebacks of up to $340mm of UK SAR aircraft, which may prove attractive sale leaseback candidates despite our cautious view of the leasing market, as well as asset-based financing for up to $125mn of UK SAR bases and infrastructure. Success on this front, coupled with some level of divestitures and capex deferrals/cancellations, should bridge BRS's near-term liquidity shortfall, allowing BRS to focus on reducing its fixed costs and gaining market share in light of the CHC bankruptcy and Super Puma grounding," said the analsyt.

For an analyst ratings summary and ratings history on Bristow Group click here. For more ratings news on Bristow Group click here.

Shares of Bristow Group closed at $13.52 yesterday.

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