UPDATE: Wunderlich Initiates Coverage on Ocean Rig UDW on Continued Growth Expectations

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In a report published Wednesday, Wunderlich Securities analyst Todd P. Scholl initiated coverage on
Ocean Rig UDWORIG
with a Buy rating and $26.00 price target. In the report, Wunderlich Securities noted, “We are initiating coverage of Ocean Rig UDW Inc. (ORIG) with a Buy rating and a price target of $26, which represents a 5.9x 2015 EV/EBITDA multiple. Ocean Rig has evolved from owning two harsh-environment semi-submersible rigs to a stand-alone company with a fleet of six high-specification and harsh-environment offshore drilling rigs with four more under construction. DryShips (DRYS-NR) remains the majority shareholder and, given the state of shipping space, does present the risk that Ocean Rig could be used as a source of capital. That being said, we believe that risk is priced into the stock, given it is trading at a discount to both its book value. With the environment of strong market fundamentals and ORIG's quality assets, we believe that the shares are a Buy at current levels.” Ocean Rig UDW closed on Tuesday at $18.02.
Posted In: Analyst ColorInitiationAnalyst RatingsTodd P. SchollWunderlich Securities
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