Wells Fargo Starts Hornbeck Offshore (HOS) at Outperform; Stock Appears To Be At The Beginning Of A Powerful Upcycle

Wells Fargo initiates coverage on Hornbeck Offshore (NYSE: HOS) with an Outperform. PT range $43-$45.

Wells analyst says, "With GOM deepwater drilling on a postpermitorium
resurgence and continued expansion of drilling in Brazil, we think the Global OSV fleet will need to expand. We believe HOS is positioned in the short term to benefit from a shortage of modern OSVs in the GOM after 25%+ of vessels departed the GOM following the Macondo accident and moratorium, and has further positioned itself to claim greater market share with a new $720MM construction program of 16 300' (6,000 dwt) OSVs to better serve the deepwater needs of the future. We estimate HOS will grow EPS from a loss of $0.49 in 2011 to earnings of $1.50 in 2012, $3.66 in 2013, and $5.00 in 2014, driven by higher rates among OSVs and utilization improvements of the MPSVs."

For an analyst ratings summary and ratings history on Hornbeck Offshore click here. For more ratings news on Hornbeck Offshore click here.

Shares of Hornbeck Offshore closed at $31.30 yesterday.

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