Standard & Poor's Equity Research has lowered its opinion on shares of Atwood Oceanics Inc., Houston, (NYSE: ATW) from Buy to Hold.

S&P analyst Stewart Glickman says first quarter earnings per share of $0.88 versus $0.65 is $0.02 above S&P’s estimate. Results were led by improved dayrates. The downgrade reflects S&P’s valuation as the shares have advanced 59% this year, best among offshore drilling contractors.

S&P also expects Atwood Oceanics may see further lengthy idle time on its midwater floater Atwood Southern Cross, given S&P’s concerns of surplus capacity in this rig category. Long-term prospects remain promising with two newbuilds on the way, but near-term looks choppy. On NAV and relative metrics, S&P kept its 12-month target price of $27.

Atwood Oceanics is an offshore drilling contractor.