Jefferies Upgrades HERO To Buy From Hold

Jefferies is upgrading Hercules Offshore, Inc. (NASDAQ: HERO) to Buy from Hold.

“Somewhat separate from our overall offshore thesis, we are upgrading HERO to Buy from Hold and increasing our 12-month PT to $4.50 from $3.00 as we believe the stock has the potential for several positive catalysts in 2011 that will lead to upward EPS revisions and reduce the probability of covenant violations and concerns of an equity offering to reduce bank debt,” Jefferies writes.

“Positive catalysts we see for the Company in 2011 include: i) a tighter than expected GOM jack-up and barge market in 2011 that will allow HERO to modestly push dayrates, ii) long-term contract renewals on the Company's five international jack-ups up for contract renewal in 2011”

Hercules Offshore closed Monday at $3.49.