Report
Preston Caldwell
EUR 100.00 For Business Accounts Only

Lowering Offshore Driller FVEs on Weaker Pricing and Utilization Outlook

We are lowering our fair value estimates for offshore drillers, in the range of about 10%-20%. Our Transocean fair value estimates move to $6.50 per share from $8.25, Diamond to $10.50 from $12, Ensco to $3.75 from $4.40, Rowan to $10 from $11, and Noble to $2.50 from $2.90. The lower fair value estimates stem from decreases in our long-term floater rig demand forecasts, which lead to lower utilization and pricing forecasts for each of the drillers. Our no-moat ratings for each of the names are ...
Underlying
Diamond Offshore Drilling Inc.

Diamond Offshore Drilling provides contract drilling services to the energy industry around the globe. The company's fleet enables it to provide services in the floater market on a worldwide basis. The company's contracts to provide offshore drilling services vary in their terms and provisions. The principal markets for the company's offshore contract drilling services are: the Gulf of Mexico, including the U.S., and Mexico; South America, principally offshore Brazil, and Trinidad and Tobago; Australia and Southeast Asia, including Malaysia, Indonesia, Myanmar and Vietnam; Europe, principally offshore the U.K., and Norway; East and West Africa; and the Mediterranean.

Provider
Morningstar
Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

Analysts
Preston Caldwell

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