Rowan Companies PLC

Offshore drilling (XLE) (IYE) is a capital-intensive industry requiring a large amount of money to keep rigs active and well-maintained.

Seadrill and Diamond Offshore have more than 20 floaters in their fleets. Ensco and Rowan Companies have more jack-ups in their fleets than peers have.

The marine oil spill in April 2010 was the worst environmental disaster in US history, causing millions of barrels of oil gushed into the Gulf.

Article focus In this article, we’ll discuss analysts’ target price revisions for offshore drilling companies in Week 8 of 2018 (ended February 23). Revisions in Week 8 Jefferies revised its target prices for two offshore drillers. On February 21, 2018, it reduced the target price for Transocean (RIG) to $12 from 413 and maintained a […]

RDC’s analyst recommendations Analysts’ consensus rating for Rowan (RDC) is 2.6, which means a “hold.” Peers Transocean (RIG), Diamond Offshore (DO), Noble (NE), and Ensco (ESV) also have “hold” ratings. Of the 31 analysts covering Rowan (RDC), 39% recommend “buy” or some equivalent, 55% recommend “hold,” and 6% recommend “sell.” Among the top offshore drilling stocks […]

Baker Hughes is scheduled to release its US crude oil and natural gas rig count report on November 11, 2017.

In Week 25, which ended June 22, Jefferies downgraded one offshore driller and revised the target prices for others.

On June 7, Noble (NE) released its June fleet status report. Most of the offshore drilling companies don’t publish a monthly fleet status report.

Baker Hughes, a GE company, is scheduled to release its US crude oil and natural gas rig count report on December 1, 2017.

The rig utilization rate has drastically fallen compared to its historical rates. The utilization rate is an important indicator to gauge demand and activity in the offshore drilling industry.

Unconventional sources of onshore drilling have started gaining popularity in recent years, but the crude from these sources are costly to produce.

The majority of offshore operations occur in six key locations worldwide that differ widely in terms of water depth, weather conditions, and remoteness.

Overall, Rowan Companies (RDC) has a comparatively stronger backlog. Higher backlogs are associated with stable revenues in the short to midterm, which reduces risk for investors.

As the above chart shows, Seadrill (SDRL) has the highest leverage, with a debt-to-asset ratio of 46%. Ensco (ESV) has the second highest ratio at 36%.

Business fixed investment represents business spending on plants, equipment, and machines. It forms an important component in the calculation of economic output.