Oil and gas services provider Hercules Offshore Inc. has a prime recovery opportunity in the Gulf Coast jackup rig market, an analyst said Friday while boosting his rating.
Raymond James analyst J. Marshall Adkins upgraded Hercules to "Outperform" from "Underperform" with a $6 price target, implying he expects the stock to jump 31 percent from Thursday's $4.58 close.
"We are essentially upgrading Hercules on the premise that the outlook cannot get much worse," Adkins said in a note to clients. "If anything, we believe that there may be upside to 2010 estimates given management's cost-cutting efforts."
The oil and gas services sector was hurt by low crude and natural gas prices last fall and winter. Hercules lost $1.07 billion, or $12.12 per share, in 2008, due in part to lower energy prices later in the year and several one-time charges.
Even though crude prices have slowly risen this year, natural gas prices have remained low.
While there are few jackup rigs currently in operation and hurricane season is under way, Hercules is well-positioned should natural gas prices rebound, Adkins said.
Jackup rigs typically stand on the ocean floor in relatively shallow waters, as opposed to other types of rigs, some of which float and drill several miles below the ocean's surface.
Shares fell 1 cent to $4.57 in afternoon trading. The stock has traded between $1.07 and $39.47 in the past 52 weeks.
source: yahoo
Raymond James analyst J. Marshall Adkins upgraded Hercules to "Outperform" from "Underperform" with a $6 price target, implying he expects the stock to jump 31 percent from Thursday's $4.58 close.
"We are essentially upgrading Hercules on the premise that the outlook cannot get much worse," Adkins said in a note to clients. "If anything, we believe that there may be upside to 2010 estimates given management's cost-cutting efforts."
The oil and gas services sector was hurt by low crude and natural gas prices last fall and winter. Hercules lost $1.07 billion, or $12.12 per share, in 2008, due in part to lower energy prices later in the year and several one-time charges.
Even though crude prices have slowly risen this year, natural gas prices have remained low.
While there are few jackup rigs currently in operation and hurricane season is under way, Hercules is well-positioned should natural gas prices rebound, Adkins said.
Jackup rigs typically stand on the ocean floor in relatively shallow waters, as opposed to other types of rigs, some of which float and drill several miles below the ocean's surface.
Shares fell 1 cent to $4.57 in afternoon trading. The stock has traded between $1.07 and $39.47 in the past 52 weeks.
source: yahoo
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