Evercore ISI Raises Price Target on Rowan Cos. (RDC) Ahead of July FSR and Earnings Report

Evercore ISI reiterated a Buy rating on Rowan Companies (NYSE: RDC), and raised the price target to $23.00 (from $22.00), ahead of the company's July fleet status report and earnings release. Evercore's 2016 EPS estimate have been cut to $1.50 from $2.25, driven by temporary dayrate concession on the UDW Rowan Resolute. However, 2017 and 2018 EPS estimates have been raised by $0.15/0.25 to $0.90/0.15, respectively. The company reports 2Q results in early August.

Analyst James West commented, "We are raising our 2017 and 2018 estimates for Rowan's July fleet status report, which detailed 1) a ultra-deepwater blend-and-extend, 2) two jackup contract extensions, and 3) 54 fewer out-of-services days in 2Q16 but a net 5 additional days in 2H16 from the April FSR. Our 2016 EPS estimate falls to $1.50 from $2.25, driven by temporary dayrate concession on the UDW Rowan Resolute, but our 2017/2018 EPS estimates increase by $0.15/0.25 to $0.90/0.15, respectively. Our price target increases to $23 from $22 based on an 8.1x multiple on our 2018 EBITDA estimate of $614 million. We continue to rate Rowan a relatively Buy among the Offshore Drillers. The company reports 2Q results in early August."

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 $17.56 yesterday.

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