Jefferies Maintains Buy on Tidewater (TDW)

Jefferies is out with its report this morning on Tidewater TDW, maintaining Buy. In a note to clients, Jefferies writes, "TDW announced F3Q11 EPS of $0.67, which was slightly above our estimate but $0.01 below Consensus likely due to minor items below the EBITDA line. Although the near-term revenue miss is disappointing, our 12-18 month view on the OSV sector remains unchanged with strong indications of a sustained rebound in demand and a much more favorable supply situation in 2012. With positive supply/demand fundamentals developing, we still believe that OSV dayrates could see a positive infection point within the next 12 months and a potential acceleration in rates some time in 2012. Given TDW's significant EPS leverage to rising international rates (approx. $0.50-0.55 for every $500 move in avg dayrate), we would be buyers of TDW on any near-term pullback." Jefferies maintains a $71 PT on TDW. Shares of TDW closed Friday at $55.50.