UPDATE: RBC Capital Markets Upgrade Rowan Companies
In a report published Wednesday, RBC Capital Markets analyst Kurt Hallead upgraded Rowan Companies (NYSE: RDC) to Outperform from Sector Perform, with a $40.00 price target.
According to the report, RDC is in the best relative position in the offshore drilling group given lack of exposure to the deteriorating legacy floater market. Demand for jackups remains robust and RDC has 3 of its 4 newbuild drillships already contracted. Moreover the it is believe RDC will initiate a modest dividend in 2014 with the flexibility to increase it over time.
“Dayrates in both the standard and hi-spec jackup markets continued to show steady improvement throughout 2013,” the report noted. “We expect both these markets to stabilize at current levels in 1H14, while RDC's peer group is likely to be impacted by a drop-off in dayrates and utilization in the legacy floater market.”
RDC indicated it would announce a modest dividend proposal to the board this month, which is expected to be small but with room to grow.
RDC closed Tuesday at $34.01.
Latest Ratings for RDC
|Apr 2016||Nomura||Initiates Coverage on||Neutral|
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