Jefferies Raises Price Target on Hornbeck Offshore (HOS) as Production in the Gulf Comes Back Online

Jefferies is maintaining its Hold rating on shares of Hornbeck Offshore (NYSE: HOS) while boosting its price target from $27 to $38.

The firm believes the recovery for deep water vessels seems to be underway as operations in the Gulf of Mexico get moving. Jefferies estimates an additional 13 rigs will be added to golf for next year.

The demand and higher dayrates for larger vessels will likely drive pricing higher on the smaller vessels, which entail will cause HOS to place more vessels back into service in 2012. Higher operating costs are likely going to weigh heavy on margins.

Due to higher MPSV utilization and higher OSV dayrates/utilization, Jefferies is raising its Q4 EPS estimate from $0.26 to $0.32. The firm is also increasing its FY11 and FY12 EPS estimates from ($0.53) and $1.40 to ($0.29) and $1.77.

For more ratings news on Hornbeck Offshore click here and for the rating history of Hornbeck Offshore click here.

Shares of Hornbeck Offshore closed at $34.34 yesterday.

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