Tidewater (NYSE:TDW) +9.4% in Friday’s trading to a new all-time high after Evercore ISI resumed coverage with an Outperform rating and $90 price target, saying the company is one of the biggest beneficiaries of the multi-year upcycle now beginning in the offshore oil and gas market.
Tidewater (TDW) recently completed the acquisition of 37 offshore support vessels from Solstad Offshore, solidifying its position as the largest global OSV operator with a total fleet of 228 vessels, and Evercore’s James West said the deal enhances the company’s geographical presence, particularly in the North Sea.
With more than 50% of Solstad’s current contracts up for rollover by the end of 2024, Tidewater (TDW) stands to benefit from potential increases in dayrates, which will directly impact its revenue and drive accelerated margin expansion due to its high operating leverage, West said.
The analyst noted Tidewater (TDW) will immediately realize synergies from the deal for Solstad’s vessels, further reinforcing Tidewater’s (TDW) expanding global footprint, financial profile, ability to generate free cash flow, and strengthened balance sheet for potential future M&A activities and shareholder returns.
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