The fall in July not a surprise
The fall in offshore drilling stock prices in July isn’t surprising. It’s been quite a common phenomenon recently. Almost all offshore drillers (IYE) are trading in negative territory in July.
On average, offshore drilling stocks fell 13% on July 27, 2016, compared to the beginning of the month. Below are the returns of offshore drilling stocks for the same period:
In this series, we’ll look at Wall Street analysts’ recommendations and ratings for offshore drilling companies before they release their second quarter results. It’s important to note that analysts’ estimates usually lag behind price movements, so we see upgrades when stocks have already risen. As for downgrades, they’re apparent when a company has already seen lower prices.
That being said, changes in analysts’ estimates are key drivers of short-term price movements. You should keep track of changes in analysts’ estimates because they offer insights into what the Market expects from a given company.
We’ll start by looking at analysts’ ratings for Seadrill.