ABN AMRO raised its 2001 earnings estimates for several offshore drillers and said the oil service industry was in the early stages of a multiyear growth phase.
"We are raising our 2000 and 2001 upstream capital spending growth estimates,'' analyst Asit Sen said in a research note. "We note that our views are above the latest consensus expectations. To reflect higher-than-previously expected day rates/utilization rates, we are also raising our 2001 earnings estimates and price targets," he said. "We believe that the sector is in the early stages of a multiyear growth phase. Accordingly, we would use any periods of significant near-term weakness as buying opportunities," he added.
ABN-AMRO's favorites remain buy-rated Global Marine Inc., Noble Drilling Corp., and Santa Fe International Corp., as well as outperform-rated Transocean Sedco Forex
Inc., Diamond Offshore Drilling
Inc., and Marine Drilling Cos. Inc., Sen said. ABN AMRO made the following adjustments:
raised its 2001 earnings estimate on Diamond Offshore to $1.75 per share from $1.55, and raised its six- to 12-month price target to $40 a share from $36.
raised Ensco International Inc.'s 2001 estimate to $1.35 per share from $1.30, and raised the price target to $33 per share from $30.
raised Global Marine 2001 EPS estimate to $1.20 from $1.15 and took the price target to $29 from $26.
raised Marine Drilling 2001 estimate to $1.15 from $1.10 a share, and raised the price target to $28 from $26.
increased Noble Drilling's 2001 EPS estimate to $1.85 from $1.80, and the price target to $44 from $41.
raised Transocean Sedco 2001
EPS view to $2.25 from $2.00, and took the price target to $49 from $44.
raised Santa Fe International 2001 EPS estimate to $1.90 from $1.75, and the price target to $40 from $36.