Duncan-Williams Reiterates Strong Buy and PT of $10.50 on Hercules Offshore (HERO)

Duncan-Williams reiterated its Strong Buy rating on Hercules Offshore HERO. At the same time, Duncan-Williams left its price target unchanged at $10.50, even though it lowered its 2011 earnings per share forecast. In a research report published today, Duncan-Williams states, "HERO announced two officer changes and provided an update on the current quarter. The current update includes the announcement the company has sold Delta Towing in an asset sale causing a non cash impairment charge of $13 million as well as an $8 million charge for the permanent importation of Rig 3 into Mexico. Delta was sold for $30 million in cash plus retention of $6.3 million in working capital. Based on the above information, we have lowered our 2011 earnings estimate to a loss of $0.35 per share from a loss of $0.30 per share. Our 2012 earnings estimate remains $0.35 per share. We reiterate our STRONG BUY rating and 12 month target of $10.50 per share, which is based on 30 times our 2012 earnings estimate. The permitting process in the domestic market continues to improve and we expect HERO to benefit from both the improving market and the recent Seahawk asset acquisition." On Monday, Hercules added 0.17% to its value to close the day at $5.82.