NEW YORK (TheStreet) -- Ensco (ESV) stock is declining by 4.53% to $10.11 in pre-market trading on Monday, following a rating downgrade to "underweight" from "equal weight" at Barclays (BCS) this morning.
The firm has a $7 price target on the stock.
The downgrade comes as the London-based offshore drilling company faces "unimpeded downside" within the industry, Barclays wrote. The firm pushed back its offshore recovery assumptions by another year.
"Until restructuring takes place, we don't expect any consolidation and few rig retirements, keeping the massive oversupply of floaters (particularly 6th/7th gen) firmly intact," Barclays added.
Barclays is adjusting the company's fleets to assume that all currently idle rigs won't work until 2018 and the rigs coming off contract until then have a 25% success rate of being extended or recontracted.
The firm anticipates potential downside of 33%.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
Ensco's weaknesses include its generally disappointing historical performance in the stock itself and weak operating cash flow.
You can view the full analysis from the report here: ESV
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.