ENSCO International is being kept at a Buy rating by Zacks senior energy analyst Sheraz Mian. For details, we turned to his recent report and excerpted the following :
We are maintaining our Buy recommendation on ENSCO shares, as we continue to see upside despite its strong recent run up. We believe that continued strong global demand for the company\'s fleet of premium jackups will help sustain its earnings momentum going forward. We think that the GoM [Gulf of Mexico] jackup market may have already bottomed, as evident from recent contract rollovers at higher rates.
Our positive earnings revision reflects this view. Our new 2007 and 2008 EPS [earnings per share] estimates are $7.17 and $9.12, up from $7.06 and $8.60, respectively. We have raised our price objective to $68 per share, which we determine using 2007 P/E [price-to-earnings] and EV [enterprise value]/EBITDA [earnings before interest, taxes, depreciation and amortization] multiples of 9.5x and 5.9x, respectively, both well within historical trading ranges.
We believe that ENSCO shares are still attractively positioned and offer upside from current levels. The company also enjoys strong leverage to the international drilling scene, which continues to remain fairly robust. The company is also in excellent financial health and is actively returning cash to shareholders through dividends and share buybacks. Despite the stock\'s rebound in the recent past, it is still trading at attractive levels relative to its offshore drilling peers.
Read the analyst report on ESV
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