Diamond Offshore Way Oversold – Analyst Blog
Source: http://www.zacks.com/stock/news/17885/Diamond+Offshore+Way+Oversold+-+Analyst+BlogPosted on Tuesday, March 3rd, 2009 | In Stocks to Watch
Diamond Offshore Drilling, Inc. (DO) posted solid 4th-quarter 2008 results, reflecting more than 36% year-over-year increase in drilling revenue on the back of continued dayrate gains. Net income and operating cash flow increased nearly 55% and 34%, respectively, in 2008.
The company’s $10.3 billion backlog provides for a very high level of earnings and cash flow visibility. We expect significant free cash flows, both this year and next. Management has established quite a track record in returning excess cash to shareholders through regular special dividends.
Though we have lowered our estimates to reflect a softer outlook for the jackup fleet, our Buy recommendation and target price remain unchanged. Our current target price is $100 per share.
Read the full analyst report on “DO”
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