UPDATE: Clarkson Capital Markets Upgrades Forbes Energy Service to Outperform on Valuation

Clarkson Capital Markets raised its rating on Forbes Energy Service (NASDAQ: FES) from Market Perform to Outperform while reducing its price target from $5 to $3. Clarkson Capital Markets commented, "With shares of Forbes Energy Services trading near the $2 level we believe the company now falls into the “Special Situation” category. The company trading at a significant discount to book value and with 3% short interest (as of 10/31/31) we believe little downside remains in shares and that they now represent a de facto option on the recovery of US onshore activity which we expect will occur in 1H13. In our view, the most significant risk to shares at this point is a pronounced downturn that would result in insolvency for the company but we view that scenario as remote."Forbes Energy Services closed at $2.10 on Wednesday.