UPDATE: Dahlman Rose Lowers PT on Pacific Drilling SA on Strong 4Q12, Light 2013 Guidance

In a report published Friday, Dahlman Rose reiterated its Buy rating on Pacific Drilling SA (NYSE: PACD), but slightly lowered its price target from $12.50 to $12.00.

Dahlman Rose noted, “PACD provided revenue efficiency guidance of 91%-94%, which prompts us to lower our expectations to 93% from 94%. Costs are forecast to be higher as well; total rig opex (including direct rig related opex and shore-based support costs) are expected to be $200k-$207k/day, up from ~$202k/day in 2012. Interest expense and SG&A costs are both expected to be higher than previously forecast as well. While some of the cost increases are due to labor inflation, much is due to the costs associated with a growing fleet, which is beneficial to NAV and the stock price if disappointing in the near term.”

Pacific Drilling SA closed on Thursday at $9.35.