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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: DEER HUNTER who wrote (43552)	4/29/1999 9:48:00 PM
From: getanewlife	Respond to of 95453

Good news for Rig: First Union Capital upgraded shares of Transocean Offshore (RIG), an oil-drilling company, from "hold" to "buy" based on current valuation. RIG currently trades at 16x their 2000 EPS estimate of $1.86. Thus far, shares of RIG are up just 10.7% this year compared to other drillers, which are up over 50%. They raised RIG's price target from $34 to $40, which translate to a P/E of 21.5x its 2000 earnings estimate. First Capital noted that oil and gas prices have risen faster than their previous expectation, however, they feel that oil prices can remain at current levels given depleted reserves. Lower oil prices over the past year or so contributed to lower day rates for RIG and other drilling companies, however, First Capital believes that if oil prices remain at these levels, there would be an uptick in day rates, which would contribute to higher earnings for RIG. Thus, investors should take advantage of current price to add to positions.