NEW YORK (TheStreet) -- Diamond Offshore Drilling (DO) stock is up 0.35% to $48.74 in pre-market trade this morning after BMO Capital Markets upgraded its industry rating to "market perform" from "under perform."
The firm said the global offshore oil and gas drilling contractor has a better risk/reward balance over the next six to 12 months.
Separately, TheStreet Ratings team rates DIAMOND OFFSHORE DRILLING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DIAMOND OFFSHORE DRILLING INC (DO) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has slightly increased to $303.02 million or 9.74% when compared to the same quarter last year. Despite an increase in cash flow, DIAMOND OFFSHORE DRILLING INC's cash flow growth rate is still lower than the industry average growth rate of 49.24%.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Energy Equipment & Services industry average. The net income has decreased by 17.1% when compared to the same quarter one year ago, dropping from $175.99 million to $145.81 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Energy Equipment & Services industry and the overall market, DIAMOND OFFSHRE DRILLING INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: DO Ratings Report