Pritchard Revises Estimates for Noble Corp in Light of New Acquisition (NE)

Noble Corp NE announced yesterday that it would acquire Frontier Drilling. This comes as a welcome surprise to those who were wondering what Noble was going to do with its cash. Pritchard analysts Brian Uhlmer and Ryan Fitzgibbon said, "According to our math, NE is paying ~9.9x Frontier's 2011 EBITDA, which is a premium to the group’s 4.7x multiple, 4.9x where those with the five largest floater fleets current trade, and NE’s 3.2x 2011 EBITDA." Pritchard change its 2010 and 2011 EPS estimates to $4.75 and $5.44 from $5.21 and $5.42. Pritchard's price target for Noble is $44.00, roughly 8x its 2011 EPS estimate. Shares of NE are currently trading at $30.00.