JP Morgan On Offshore Drillers

JP Morgan has published a research report on Offshore Drillers in the Oil Services & Equipment sector.

In the report, JP Morgan writes "We believe this group will continue to underperform. After assessing the most current data on newbuilds, fixtures, the Gulf of Mexico, and dayrates, not a whole lot has changed since the summer. While leading-edge dayrates on ultra-deepwater floaters have stabilized around $440kpd, we now think the risk of idle rigs has increased as the market remains oversupplied with little improvement. The bifurcation trend across both floaters and jackups has become even more pronounced, to result in a further reduction to our earnings estimates. Lastly, valuation levels aren't particularly attractive considering the group is trading about 10% above our DCF values."

Companies related to this report include:

Transocean Ltd. (NYSE: RIG) $69.97 Underweight
Diamond Offshore Drilling (NYSE: DO) $64.06 Underweight
Noble Corporation (NYSE: NE) $34.85 Neutral
Pride International Inc. (NYSE: PDE) $31.53 Neutral
Ensco plc (NYSE: ESV) $52.66 Neutral
Rowan Companies, Inc. (NYSE: RDC) 34.84 Overweight