UPDATE: Goldman Sachs Upgrades ENSCO to Buy

Goldman Sachs raises its rating on ENSCO (NYSE: ESV) from Neutral to Buy on positive market outlook ahead of the company's earnings.

Goldman Sachs says, "The company has been under-earning for the past few years and is now on the cusp of seeing major improvement in margins and earnings. We forecast operating margins to increase to the mid-30% range in 1Q2012 from high-20% currently. These were above mid-50% range in 2008. ...We expect EPS to grow 13% in 2013 and another 19% in 2014. This will be driven by rising dayrates for its rigs, the addition of 1 underconstruction floater in 2012 and 1 in 2013. In addition, 2 high spec jackups should be added to the fleet in 2013."

ESV closed at $54.62 a share on Friday.