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CapitalOne and Swedbank Upgrade Diamond Offshore Post-3Q16

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Upgrades

Diamond Offshore Drilling (DO) released its 3Q16 results on October 31, 2016. On the same day, Capital One Securities upgraded Diamond Offshore to “equal weight” from “underweight” and gave it a target price of $19.

The next day, Swedbank upgraded DO to a “buy” from a “reduce,” but it reduced the company’s target price to $19 from $20.

Following Diamond Offshore’s earnings, a few analysts revised their target prices for its stock:

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  • FBR Capital Markets reduced its target price to $13 from $16 and maintained its “underperform” rating on the stock.
  • Jefferies maintained its “hold” rating on the stock and increased its target price to $18 from $17.
  • Pareto Securities decreased its target price to $16 from $17 and put a “sell” rating on the stock.

Analysts’ recommendations

Diamond Offshore is covered by 35 Wall Street analysts. Of those, three analysts (8% of the total) have given it “buy” recommendations, 20 analysts (56%) have given it “holds,” and 12 analysts (34%) have recommended “sells.”

Diamond Offshore’s target price of $16.52 compared to its price on November 1, 2016, implies a downside potential of 1%.

Diamond Offshore’s peers

Wall Street analysts’ consensus recommendations for other offshore drillers (XLE) are as follows:

  • Of the eight analysts covering Ocean Rig (ORIG), none gave it “buys,” 12% gave it “holds,” and 88% gave it “sells.”
  • Of the 39 analysts covering Noble (NE), about 15% gave the company “buys,” 54% gave it “holds,” and 31% gave it “sells.”
  • Of the 37 analysts covering Rowan Companies (RDC), 22% gave it “buys,” 62% gave it “holds,” and 16% gave it “sells.”
  • Of the 15 analysts covering Pacific Drilling (PACD), 7% gave it “buys,” 40% gave it “holds,” and 53% gave it “sells.”
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