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Deutsche Bank downgraded Hercules Offshore, Inc. (NASDAQ: HERO) Friday from Buy to Sell and cut its price target from $4 to $0.
Analyst Mike Urban commented that the "offshore drilling market continues to deteriorate at an accelerating pace as evidenced by a recent wave of contract terminations including HERO's Rig 261."
Urban explained that demand had become "nearly non-existent" and, with more capacity entering the marketplace, any chance for a recovery was "bleak" in the near term.
Bankruptcy was not seen as a foregone conclusion because the company had assets upon which it can draw, but such a course would still burn cash and would eventually leave little to no equity, according to Urban.
The analyst stated that the firm had been relatively positive on HERO due to the "expectation that very few newbuilds would enter the shallow US GoM where HERO has a commanding market position," however, "the collapse in oil price has eviscerated demand, especially for older generation units like HERO's."
Urban changed the EPS (loss) estimates from $(1.53) to ($1.85) for 2015. For 2016, the estimates were changed from $(0.45) to $(0.70).
Upside risks included "a recovery in shallow water drilling demand in the Gulf of Mexico as well as less than expected newbuild supply growth," according to the analyst note.
Hercules Offshore recently traded at $0.60, down 17 percent.
Latest Ratings for HERO
Date | Firm | Action | From | To |
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Feb 2015 | Deutsche Bank | Downgrades | Buy | Sell | Jan 2015 | Raymond James | Downgrades | Market Perform | Underperform | Jan 2015 | Jefferies | Maintains | | Hold |
View More Analyst Ratings for HERO
View the Latest Analyst Ratings
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Hercules Offshore, Inc.
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CODE : HERO |
ISIN : US4270931094 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Hercules Offshore is based in United states of america. Hercules Offshore is listed in Germany and in United States of America. Its market capitalisation is US$ 82.0 billions as of today (€ 76.7 billions). Its stock quote reached its lowest recent point on October 12, 2015 at US$ 0.05, and its highest recent level on April 26, 2024 at US$ 19.61. Hercules Offshore has 4 183 629 824 shares outstanding. |