Monday, October 18, 2010

Wells Fargo (NYSE:WFC) Down on Pride International (NYSE:PDE)

Wells Fargo (NYSE:WFC) downgraded Pride International (NYSE:PDE) from "Outperform" to "Market Perform," citing valuation, which they did raise from $32-35 to $34-36.

Wells said, "After strong price performance for the offshore drilling group since 9/7 (+19% on average versus +7% for the SPX), and PDE in particular (+23%), we believe the risk/reward profile for PDE shares is less compelling at current valuation of 7.0x 2011E EBITDA and 120% EV/estimated NAV. While we remain comfortable with our estimates and PDE management's ability to execute, the drilling fleet is largely contracted through 2011, so we see limited opportunity for positive near-term catalysts, to continue this recent outperformance."

Pride ended Friday's trading session at $31.95, gaining $0.15, or 0.47 percent.

Volume for the day was up over 50 percent from its daily 3-month average.

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