Noble Upgraded by RBC

Noble received an investment-rating upgrade Friday from RBC Capital Markets to a rating of sector perform from underperform, as the firm highlighted improving rig utilization. In a note to clients, RBC noted the upgrade comes as the firm is observing “an improving environment for offshore drillers.” It noted contracted rig utilization has bottomed and modest improvements are being seen with idle rigs going back to work.

The firm raised its 2018 and 2019 earnings-per-share estimates for Noble, citing “commentary suggesting that Noble will be able to put currently idle or stacked rigs to work over the next 24 months.” RBC kept its investment rating on the stock at $5 per share, above the stock’s Thursday closing price of $3.23. It noted $5 represents 6.3 times its our discounted mid-cycle estimate for earnings before interest, taxes, depreciation and amortization of $1.0 billion in 2022.

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