UPDATE: Dahlman Rose Upgrades Hercules Offshore to Buy
Dahlman Rose raised its rating on Hercules Offshore (NYSE: HERO) from Hold to Buy and established a $6.50 price target.
Dahlman Rose noted, "We expect the US GOM Jackup market to continue to strengthen in the coming quarters. We believe there could be $5-10,000/day of upside to our dayrate forecasts and expect to see higher rates in the coming monthly fleet status reports. … We are upgrading HERO to Buy with a $6.50 target based on 5x 2013E EBITDA. We estimate roughly two-thirds of the gross profit should come from the Domestic Offshore rig fleet in 2013 where we see upside based on higher dayrate potential."
Hercules Offshore closed at $4.94 on Thursday.
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