Wells Fargo Upgrades Gulfmark Offshore (GLF) to Outperform on Capital Returns
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Price: $28.37 --0%
Rating Summary:
5 Buy, 6 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
5 Buy, 6 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo upgraded Gulfmark Offshore (NYSE: GLF) from Market Perform to Outperform and raised its valuation range from $32-$34 to $38-$40 on dividend/buyback news.
The firm comments, "On the heels of its recent $200MM 10- year debt offering (6.375% coupon priced at 100.5% of par) GLF announced it will use some of the proceeds (after repaying $90MM of credit facilities) to pay a $1.00/share dividend to shareholders on December 31, 2012 ($27MM), and to establish a recurring quarterly cash dividend of $0.25/share (3.0% yield, $27MM/year); GLF has also approved $100MM for potential share repurchases. We view this debt-financed return of cash to shareholders as a positive for shareholders who will now "get paid to wait" for GLF's growth to increase in H2 2013-2014 as new vessels are delivered and rate increases are more likely. We are leaving our estimates for GLF's operations unchanged but trimming our Q4E EPS to $0.24 from $0.28; our 2012E EPS to $1.25 from $1.29; and our 2013E EPS to $2.78 from $3.01 to account for the higher interest expense and 0.8MM fewer shares in 2013. We are increasing our valuation to $38-40 from $32-34 (7.1-7.4x 2013E EBITDA, up from 6.5-6.8x) and upgrading the stock to Outperform."
For an analyst ratings summary and ratings history on Gulfmark Offshore click here. For more ratings news on Gulfmark Offshore click here.
Shares of Gulfmark Offshore closed at $33.24 yesterday.
The firm comments, "On the heels of its recent $200MM 10- year debt offering (6.375% coupon priced at 100.5% of par) GLF announced it will use some of the proceeds (after repaying $90MM of credit facilities) to pay a $1.00/share dividend to shareholders on December 31, 2012 ($27MM), and to establish a recurring quarterly cash dividend of $0.25/share (3.0% yield, $27MM/year); GLF has also approved $100MM for potential share repurchases. We view this debt-financed return of cash to shareholders as a positive for shareholders who will now "get paid to wait" for GLF's growth to increase in H2 2013-2014 as new vessels are delivered and rate increases are more likely. We are leaving our estimates for GLF's operations unchanged but trimming our Q4E EPS to $0.24 from $0.28; our 2012E EPS to $1.25 from $1.29; and our 2013E EPS to $2.78 from $3.01 to account for the higher interest expense and 0.8MM fewer shares in 2013. We are increasing our valuation to $38-40 from $32-34 (7.1-7.4x 2013E EBITDA, up from 6.5-6.8x) and upgrading the stock to Outperform."
For an analyst ratings summary and ratings history on Gulfmark Offshore click here. For more ratings news on Gulfmark Offshore click here.
Shares of Gulfmark Offshore closed at $33.24 yesterday.
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