On Oct 9, Zacks Investment Research upgraded
Pacific Drilling S.A.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
OCEAN RIG UDW (ORIG): Free Stock Analysis
PACIFIC DRILLNG (PACD): Free Stock Analysis
PIONEER EGY SVC (PES): Free Stock Analysis
SEADRILL PTNRS (SDLP): Free Stock Analysis
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The offshore drilling contractor Pacific Drilling S.A. has
delivered positive earnings surprises in the last 3 quarters with
an average beat of 121.43%. Consistently good performance has
driven the company's earnings estimates higher.
The Zacks Consensus Estimate for 2013 increased 9.7% in the last
60 days to 34 cents per share, reflecting year-over-year growth
of 115.6%. For 2014, the consensus increased 112.2% over the same
time period to 73 cents per share, reflecting growth of 112.2%.
In the first half of 2013 the company invested $217.5 million.
Pacific Drilling expects to invest $1.9 billion for the
construction of its four new drillships. The construction of new
drillships indicates there will be demand in the long run.
In addition, the upgrade of existing rigs as per customer
specification will also help the company to increase its customer
The present valuation also makes the stock attractive. The P/B
ratio of the company in the trailing twelve months is 1.05%,
which is lower than its industry peers of 1.13%. The Return of
Equity of the company in the trailing twelve months was 2.2%,
higher than the industry average of 1.7%.
Other Stocks to Consider
Besides Pacific Drilling S.A., other companies in the sector are
also performing well and have a favorable Zacks Rank. The stocks
worth considering are
Ocean Rig UDW Inc.
Seadrill Partners LLC
Pioneer Energy Services Corp.
). Ocean Rig UDW and Seadrill Partners have a Zacks Rank #1
(Strong Buy) while Pioneer Energy Services has a Zacks Rank #1