Jefferies Raises Price Target on Union Drilling (UDRL), Now Positioned as a Possible Acquisition

Jefferies is reaffirming its Buy rating on shares of Union Drilling (NASDAQ: UDRL) and is raising its price target from $8 to $9.

The firm believes management decision to divest 31 of its small rigs, out of 82 total, and continue deployment of newbuilds over the next 3-6 months is the right move. Jefferies also notes that UDRL is providing shareholders with solid long-term value and the decision positions Union Drilling as a acquisition target.

An analyst at Jefferies comments, "With more uncertainty poised to impact the land rig market, UDRL should be better positioned in a downturn than in 2008 with an upgrade in its customer base, better average fleet quality, and solid backlog."

Jefferies raised its FY11 and FY12 EPS estimates from ($0.17) and ($0.19) to ($0.16) and ($0.04).

For more ratings news on Union Drilling click here and for the rating history of Union Drilling click here.

Shares of Union Drilling closed at $7.49 yesterday.

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