Goldman Sachs Upgrades Atwood Oceanics (ATW) to Buy, Sees 24% Upside

Goldman Sachs upgraded Atwood Oceanics (NYSE: ATW) from Neutral to Buy with a price target of $68.00 (from $60.00) citing earnings acceleration.

The firm cited: "1) ATW should generate 29% EPS CAGR in 2013-15, driven by the delivery of 7 newbuild rigs; 2) the newbuilds should qualitatively improve the fleet (10 of ATW’s 14 rigs will be new), raise EPS by $7.11, and generate sizeable free cash ($8.65/share) given low maintenance capex ($0.50/share); and 3) by CY2015, ATW could offer large dividends and buybacks, as operating cash flow reaches $11.60/share, maintenance capex is $0.86/share and $3-$4/share would be available for dividends or buybacks even if $6-$8/share is invested in growth and debt pay-down."

For an analyst ratings summary and ratings history on Atwood Oceanics click here. For more ratings news on Atwood Oceanics click here.

Shares of Atwood Oceanics closed at $54.93 yesterday.

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