NEW YORK (TheStreet) -- Shares of Atwood Oceanics (ATW)ATW are lower -0.44% to $45.50 on Monday.

The global offshore drilling contractor had its price target lowered to $69.00 from $70.00 at Barclays (BCS)BCS.

The price cut was driven by lower dayrate expectations. "With limited contracts recently, the market is struggling to define the current leading edge rate," Barclays said.

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TheStreet Ratings team rates ATWOOD OCEANICS as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ATWOOD OCEANICS (ATW) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ATW's revenue growth has slightly outpaced the industry average of 8.2%. Since the same quarter one year prior, revenues rose by 16.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ATWOOD OCEANICS has improved earnings per share by 16.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ATWOOD OCEANICS increased its bottom line by earning $5.32 versus $4.14 in the prior year. This year, the market expects an improvement in earnings ($5.60 versus $5.32).
  • Net operating cash flow has increased to $160.19 million or 37.01% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 23.27%.
  • The gross profit margin for ATWOOD OCEANICS is rather high; currently it is at 53.79%. Regardless of ATW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATW's net profit margin of 29.29% significantly outperformed against the industry.
  • ATW's debt-to-equity ratio of 0.70 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that ATW's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.15 is high and demonstrates strong liquidity.
  • You can view the full analysis from the report here: ATW Ratings Report

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