Atwood Oceanics (IL/A): Raising 2007E EPS; valuation back in line after recent rally - Goldman Sachs - December 06, 2005
We are raising our 2007 EPS estimate for Atwood to $10.00 from $9.20 on higher offshore drilling rig day rates + lower tax rate. The stock is up 12% over the last week and now trades at a 6% discount to the peer group, which is about in line with its historical average. As a result, we maintain our IL/A rating and $94 fair value (8.5x 2006E EV/ EBITDA) = 25% upside potential. We are lowering our 2006E EPS estimate to $5.30 from $5.69 as our previous estimate included a $0.38 gain on the announced sale of a BOP stack, which we had previously treated as recurring. There are no other changes to our operating assumptions.
Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Jason Gilbert; Terry Darling.
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Atwood Oceanic (IL/A): FY4Q results in-line with expectations December 05, 2005
Atwood Oceanics recurring FY4Q2005 EPS of $0.24 was near the high-end of $0.20-0.25 guidance, in-line with our estimate and slightly below $0.25 consensus. We view results as neutral to the stock near-term given the +10% rally over the past week from an oversold position. Contract drilling revenue was 7% above our estimate, offset by 12% higher operating expenses. EBITDA was 3% below our estimate (-$0.02 variance), but offset by lower tax, depreciation and net interest expense (+$0.02). We maintain our IL/A rating and $94 fair value (8.5x 2006E EBITDA) = 25% upside potential.
Conference call is 3:30pm EST, Monday, December 5, dial-in 1-800-362-0571.
KEY TOPIC FOR CONFERENCE CALL IS EXPECTED CONTRACT DAYRATES ON AVAILABLE RIGS.
Atwood has 90% of rig days already contracted for 2006. Rigs with available time include the Richmond and the Southern Cross. For 2007, which is 60% contracted, Atwood has available time on the Eagle, Richmond, Southern Cross and Vicksburg.
Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Jason Gilbert; Terry Darling. |
