GulfMark Offshore, Inc. (GLF): Lowering Estimates on GOM Weakness
Stock Rating: 1-Overweight
Sector Rating: 2-Neutral
Price: US$ 27.87
Price Target: US$ 37.00
Current Year EPS: 5.10
Next Year EPS: 5.60
Market Cap: US$ 720 (m)
􀂃 We continue to believe that GulfMark is well positioned to navigate a more challenging offshore environment
due to its high quality fleet, broad geographic exposure, and strong contract coverage. We expect the
company's spot market exposure in the GOM will lead to lower near-term results as this market finds a bottom;
however, we continue to believe the shares are attractive and would add to positions on weakness as GOM
market conditions become more widely recognized. We maintain our 1-OW rating.
􀂃 For more details on the market please see our note released this morning "Tough Conditions in the GOM
Vessel Mkt."
􀂃 Conditions in the Gulf of Mexico shallow water and deep shelf markets deteriorated further in June as vessel
operators began to further undercut each other on pricing to maintain utilization.
􀂃 The N. Sea has improved modestly w/ the start of the summer construction season. GLF's N.Sea results
should also benefit from the recent weakening of the dollar versus the pound & NOK.
􀂃 SE Asia remains a good market for GulfMark.
􀂃 We are reducing our '09 and '10 EPS ests to $5.10 (from $5.65) and $5.60 (from $6.20), resp.