The deepwater drilling company is scheduled to report its fourth-quarter results on Wednesday. Analysts, on average, anticipate earnings of 52 cents a share on revenue of $571.49 million.Goldman Sachs analysts upgraded the stock to a buy on Monday. "Following a dip in drilling activity post the GOM Macondo accident, deepwater drilling activity is back on its secular growth trend," Goldman Sachs analysts wrote in a report Monday. "Exploration and development drilling activity is forecast to increase in all parts of the world, including GOM, West Africa, Brazil, Australia, Southeast Asia and the North Sea. Rising deepwater drilling and the subsequent construction activity benefits OII greatly, hence our upgrade of the stock to Buy." Oceaneering shares hit a 52-week high Monday of $54.15. The stock's 52-week low of $31.77 was set on Oct. 4. Oceaneering has a forward P/E of 20.9X; the average for oil equipment and services companies is 13.97X. For comparison, Diamond Offshore (DO) and Helmerich & Payne (HP) both have lower forward P/Es of 12.31X and 10.42X respectively. Of the 23 analysts who covered the company, 12 gave Oceaneering a hold rating. Ten analysts gave Oceaneering a buy rating and one gave it a sell. TheStreet Ratings gives Oceaneering an A grade with a buy rating and has a $68.84 price target on the shares. The stock has increased 17.49% year to date.
Magellan Midstream Partners The energy transportation and storage company reported fourth-quarter earnings of $110.3 million, or 97 cents a share, last week, an increase from year-ago earnings of $88 million, or 78 cents. "MMP has been successful in diversifying its business into crude oil and should benefit from strong demand for additional midstream infrastructure and the favorable fundamental backdrop," Wells Fargo analysts wrote in a Feb. 8 report. "This, in turn, should enable the partnership to deliver above-average distribution growth, in our view. However, we are maintaining our Market Perform rating as MMP's growth prospects appear fairly reflected in the current valuation." Shares of Magellan Midstream hit a 52-week high Monday of $69.73. The stock's 52-week low of $51 was set on Aug. 8. Magellan Midstream has a forward P/E of 16.94X; the average for pipeline companies is 57.91X. For comparison, Kinder Morgan Energy (KMP) and Oneok (OKE) both have higher forward P/Es of 33.69X and 19.79X respectively. Of the 17 analysts who cover Magellan Midstream, nine of them gave the stock a hold rating and eight gave it a buy rating. TheStreet Ratings gives Magellan Midstream an A+ grade with a buy rating and has a $82.02 price target on the shares. The stock is up less than 1% so far in 2012.
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