Jefferies Analyst Upgrades GlobalSantaFe and Transocean to "Buy" From "Hold"
NEW YORK (AP) -- A Jefferies & Co. analyst upgraded Transocean Inc. and GlobalSantaFe Corp. on Monday, saying the decline in the oilfield services providers' stocks since the companies announced a merger is overdone.
Last month, GlobalSantaFe and Transocean Inc. agreed to join forces to create the world's biggest fleet of oil rigs. These companies operate ships that oil companies use to drill for oil, as well as other oil services.
Shares of both companies are down more than 13 percent since the deal was announced. Jefferies analyst Judson E. Bailey said investors are worried that decaying credit quality could drag the economy into recession, which would stanch demand for energy.
He said while the risks have increased, the sell-off is too much. He upgraded both companies' shares to "Buy" from "Hold."
He said the $16 billion in contracts the two Houston-based companies have lined up should assure they can close the deal despite the volatility in the debt markets.
Monday, August 13, 2007
Jefferies Upgrades Transocean/GlobalSantaFe
Ahead of the Bell: Oilfield Services