UPDATE: RBC Capital Markets Upgrades Oceaneering International

In a report published Wednesday, RBC Capital Markets analyst Kurt Hallead upgraded Oceaneering International OII to Outperform from Sector Perform, with a $89.00 price target. According to the report, OII is viewed as having one of the few secular growth stories in oilfield services currently with a five-year earnings growth profile that should yield a 15% CAGR. It is believed that 2014 and 2015 Street EPS estimates are now reasonable and believe the company has attractive relative upside after the pullback during the final two months of 2013. “Subsea tree installations and the growing number of subsea completions are expected to be the main drivers of growth in OII's Subsea Products and Subsea Projects business segments,” the report noted. “The Subsea Products segment includes the highly profitable subsea tooling business, which continues to be the quarterly swing factor for segment operating margins. The company's tooling business is most profitable when sold into production or life of the field applications.” The reported asserted the Subsea Products segment includes the highly profitable subsea tooling business, which continues to be the quarterly swing factor for segment operating margins. OII's tooling business is most profitable when sold into production or life of the field applications. OII closed Tuesday at $76.59.