J.P. Morgan Lowers Diamond Offshore Drilling (DO) Price Target To $79

J.P. Morgan analysts J. David Anderson, Adam Aron and Samantha Hoh maintained their rating of Underweight for shares of Diamond Offshore Drilling Inc DO and lowered the price target to $79 per share, down from the previous price target of $87 per share. The analysts said that although the stock was not cheap, Diamond Offshore Drilling Inc had limited near-term downside and could be more defensive in a weak market. They also noted that Diamond Offshore Drilling Inc's large annual dividend, recently 9.2%, adds to the defensive nature of Diamond shares. The J.P. Morgan analysts wrote, "we continue to rate DO Underweight and are lowering our Dec 2010 price target to $79 from $87 previously. DO is still not obviously cheap, and while currently trading at 8.0x our 2011E adjusted earnings compared to the group at 7.0x, our new price target assumes the stock appreciates to 9.0x, in line with our price target multiple for the group at 8.9x."