A Big Wall Street Upgrade for These Offshore Drillers: Buy or Sell?

On September 26, UBS analysts made waves in the offshore drilling contractor sector, raising their price targets for shares of Transocean LTD (NYSE: RIG), Noble Corporation Ordinary Shares (UK) (NYSE: NE), Diamond Offshore Drilling Inc (NYSE: DO), ENSCO PLC (NYSE: ESV), and Rowan Companies PLC (NYSE: RDC). The market reacted favorably to the news, lifting shares of all five companies -- as well as those of Atwood Oceanics, Inc. (NYSE: ATW), which is soon to be acquired by ENSCO -- between 5% and 10%.

Let's take a closer look at UBS's upgrade and what the near-term and longer-term prospects are for offshore drillers. Even after the big price jump following the upgrade, there's still potentially big upside for investors once offshore drilling demand picks up. But there still remain big risks investors should consider before investing in any offshore drillers.

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Source: Fool.com