Majority recommend a “sell”
Currently, 11 analysts give recommendations on Ocean Rig (ORIG). Of these, only one analyst, or 9%, has given the company a “buy” recommendation. Two analysts, or 18%, have given it a “hold” recommendation, and eight, or 73%, have given it a “sell” recommendation.
As we saw in the previous part of the series, Seadrill (SDRL) doesn’t have any “buy” ratings. Two analysts have given Transocean (RIG) and Diamond Offshore Drilling (DO) a “buy” recommendation. Ten analysts have given Rowan Companies (RDC) a “buy.”
The consensus target price for Ocean Rig is $1.54, which implies a downside of 29% compared to the current Market price of $2.17 as of July 27, 2016.
Among the analysts, Evercore is the most bullish on Ocean Rig with a target price of $3. Nordea and Barclays have given the lowest target price of $0.50.
Like Seadrill (SDRL), the number of analysts covering Ocean Rig stock has decreased from the start of the year. In January 2016, 15 analysts gave recommendations on Ocean Rig. Now, there are only 11 analysts.
Analysts’ outlook toward the offshore drilling (OIH) industry is turning more bearish. At the start of the year, 40% of analysts gave Ocean Rig a “buy” rating, 40% gave it a “hold,” and 20% gave it a “sell.” Wall Street analysts had a consensus rating on Ocean Rig of 3.4, or a “buy.” Currently, this rating is 1.7, or a “sell.”