JP Morgan Slashes Targets For Offshore Drilling Companies (DO, ESV, RIG, NE, PDE)

JP Morgan Chase has lowered its target price and earnings estimates for various offshore drilling companies, including Diamond Offshore DO, Ensco plc ESV, Noble Corp NE, Transocean Ltd. RIG and Pride International Inc. PDE. The Deepwater Horizon, which was involved in the drilling of the well that is currently ejecting out large amount of oil into the Gulf of Mexico, belonged to RIG. RIG had given the Deepwater Horizon drilling rig on lease to BP plc. The analysts mention, "With changes to deepwater drilling clearly on their way, we've made our first pass at quantifying the impact to the Oilfield Service industry. While many of the potential changes will likely be positive in the medium and longer term, we see a number of negative implications for offshore drillers over the next several years, causing us to reduce our estimates and price targets for the group.” Although JP Morgan views the shares of RIG as attractive, there is a downside risk. JP Morgan Chase believes that weakness in the market weakness should be used as an opportunity to invest in Halliburton HAL and Schlumberger SLB. Read more from Benzinga's Company news.