Goldman Sachs Reiterating Buy On Hornbeck Offshore Services (HOS)

Goldman Sachs is reiterating its Buy rating on Hornbeck Offshore Services HOS. It has a $36 price target on shares. In a note to clients, Goldman writes, "OSV fundamentals in the US Gulf of Mexico are starting to turn more positive. While we did not expect to see any strength until deepwater drilling returned, vessel utilization rates have taken a step up in March and dayrates appear to have troughed due to increased shallow water activity and non-drilling related work. We continue to expect new deepwater drilling to start as early as April and to drive the next leg of OSV demand, but faster than expected improvement represents an upside risk to our already well-above consensus estimates. We reiterate our CL Buy on HOS and see 24% upside to our $36 price target. Hornbeck shares have been weaker in the last two weeks with investors citing solid year-to-date outperformance as the key “pushback” to our call. However, HOS is the only stock in our oil service/driller coverage to trade at a discount to book value and has 4X more upside to the prior high stock price than the OSX despite having a larger/younger fleet now than in 2008." Shares of HOS closed at $28.64 yesterday.