FBR Capital Lowers Price Target on Diamond Offshore Drilling (DO) Following Bearish Implications

FBR Capital reiterates an Underperform rating on Diamond Offshore (NYSE: DO), and cut the price target to $20.00 (from $24.00), due to demand weakness, slashed five-year update, and a drop-off in floating rig removals.

Analyst Thomas Curran commented, "We are lowering our NAV-derived price target from $24 to $20 and reiterating our Underperform rating on Diamond Offshore (DO) shares due to the bearish implications of (1) demand weakness that has not only intensified, but also begun to discernibly spread into 2017; (2) Petrobras' annual rework of its rolling, fiveyear E&P budget, which was slashed 29% from last year's update and threatens the release of at least two of DO's four remaining rigs with the NOC; and (3) the dropoff in floating rig removals (retirements, scrappings, or cold-stackings). Herein, we review each of these developments."

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

Shares of Diamond Offshore closed at $25.34 yesterday.

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