Contrary to the perception created by media reports because of the BP (NYSE:BP) deepwater oil disaster, offshore drilling in deep waters remains vibrant, and is in fact growing, and Oceaneering International (NYSE:OII) is strongly positioned to profit from that reality over the next decade says Barclays (NYSE:BCS).
There has been a plethora of deepwater deals cut in the midst of the BP disaster, underscoring the demand for oil which won't be hindered by any type of accident, even one as large as BP's.
Barclays said, "We believe that Oceaneering International is well positioned to benefit from the secular growth in deep-water drilling and subsea completions that we forecast over the coming decade. Given its unique franchise and long-term visibility in its markets, we believe Oceaneering should trade at a meaningful premium to the oil service group."
"We are increasing our earnings per share estimates for 2011 and 2012 to $3.80 and $4.40 from $3.45 and $4.05. The company's guidance for 2011 is $3.45 to $3.75."
Oceaneering International soared on Monday, closing at $63.77, gaining $1.90, or 3.07 percent. Barclays raised their price target on Oceaneering from $58 to $70. They maintain an "Overweight" on them.
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