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Atwood Oceanics: New Contracts and Analyst Revisions

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Aug. 18 2017, Published 7:55 a.m. ET

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In this part of the series, we’ll see the details of Atwood Oceanics’ (ATW) new contracts. We’ll also look at revisions in its target price and analysts’ consensus recommendations for the stock.

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New contract

Atwood Oceanics has secured a one-well contract extension on its ultra-deepwater rig Atwood Achiever. The contract will begin immediately once the rig finishes the current rig under the existing contract. The contract also has six one-well options. Atwood Achiever will now be busy until December 2018 if all six options are exercised. If none of the options are exercised, the rig will be busy until March 2018. The company has not disclosed the day rate for this contract.

Analyst revisions

On August 16, 2017, Citigroup reduced the target price of Atwood Oceanics to $7.23 from $8.94. In the previous week, Barclays reduced the target price to $8 from $10.

Consensus recommendations

Atwood Oceanics is quite popular among analysts. Twenty-three analysts cover the stock. The consensus rating for the stock is 3.0, which means a “hold.” The consensus recommendation for other offshore drillers (IYE) such as Ensco (ESV), Diamond Offshore Drilling (DO), Transocean (RIG), and Noble Corporation (NE) is also a “hold.”

Of the 23 analysts covering ATW stock, one analyst has given it a “strong buy,” and two have given it a “buy.” About 69.0%, or 16 analysts, have recommended a “hold.” Four analysts have rated the stock a “sell,” and none of them have given it a “strong sell.”

The 12-month consensus target price for ATW is $9.17. Compared to the current market price of $6.20 as of August 16, 2017, the target price implies a potential upside of 47.9%.

In the next part of this series, we’ll look at analysts’ revisions for Diamond Offshore Drilling (DO), Transocean (RIG), and Noble Corporation (NE).

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