UPDATE: Citi Color On Hero Estimate Increases

Citi, which raised its PT on shares of Hercules Offshore (NASDAQ: HERO), is providing some color on the stock.

“We are raising our EPS estimates in 2011 and 2012 and introducing an EPS estimate of ($0.06) per share in 2013,” Citi writes. “Our three-year earnings trajectory is now significantly higher than that of consensus.

“We are reducing our forecasted growth in rig cash costs per day to 5% per year from 10% per year (and have vetted this change with the company). HERO guided the effective tax rate to high-20s/low-30s from mid-40s previously based on geographical shifts in the revenue mix. We expect D&A to remain flat going forward as decreases resulting from the $125M impairment charge in 4Q10 are likely to offset increases from the acquired HAWK assets.”

Hercules Offshore closed Wednesday at $5.86.