Seadrill price target raised to $36 from $35 at Citi

Citi analyst Scott Gruber raised the firm’s price target on Seadrill to $36 from $35 and keeps a Buy rating on the shares. The offshore driller stocks have “rallied hard” off their April lows, rising 20% over the past month, the analyst tells investors in a research note. The firm believes the stocks now discount rates of $385 thousand barrels per day for seventh generation deepwater rigs. It expects base day rates to slip below $400 thousand barrels per day. However, with performance bonuses the drillers should be able to hold effective rates around $400 thousand barrels per day, not far from what is now implied, contends Citi. The firm believes Seadrill (SDRL) screens as most attractive in the group.