Credit Suisse Upgrades Tidewater to Outperform (TDW)

Credit Suisse is out with a research report this morning, where it upgrades shares of Tidewater TDW to Outperform, from Neutral; it has a $65.00 price target on the stock. The CS analysts noted that TDW shares lagged the OSX by 13% in 2010 on a sharp decline in earnings, with consensus EPS forecasts falling by 36% and 24% for FY11 and FY12, amongst the worst in the peer group. They added that they believe a turnaround in the earnings picture is likely, which could support a favorable re-rating of the shares relative to the peer group as expectations remain low. As for valuation, the analysts remarked, “Our 12-month target price moves to $65 from $45, reflecting a shift in our target price methodology to FY13 estimates and a target price objective of 7.5x cash flow, which is in-line with TDW's long-term average cash flow multiple.”