A slate of offshore drilling stocks were upgraded from Underperform to Market Perform Tuesday by BMO Capital, citing an improving balance of risks versus rewards.
BMO's Alan Laws said in a note that the "potential for a surprise demand uptick now outweighs already price-in risks of further weakening."
Laws said as the sector improves, companies will be increasingly differentiated, as opposed to being viewed as a single group.
"While other subsectors in Oil Services remain more attractive today, we believe value and contrarian investors should start kicking tires," said Laws.
Ensco traded recently at $54.70, up 1.15 percent; Atwood gained 2.15 percent to $50.93.
Others upgraded include: Transocean (NYSE: RIG) up 0.74 percent to $43.70; Seadrill (NYSE: SDRL) up 0.5 percent to $38.45; Diamond Offshore (NYSE: DO) up 1.6 percent to $49.33 and Rowan Companies (NYSE: RDC) up 1.1 percent at $31.74.
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