Transocean (NYE:RIG), an offshore drilling company, has seen its stock price rise by 40% year-to-date, despite disappointing earnings results that caused its stock to plunge. The decline was due to reduced activity for five rigs, which was expected, as well as higher interest expenses. However, the company’s CEO, Jeremy Thigpen, has highlighted that the day rates, contracting activity, and rig reactivations are more important than earnings, and these look promising for Transocean. Thigpen said the current utilization rate for active rigs is near 100% and reactivation will be profitable. The offshore drilling market is getting tight, and in some regions, offshore drilling activity is predicted to further rise by 40%, creating potential for the day rates to go up. Analysts also consider Transocean superior to its peers due to its large fleet and backlog of $8.5bn. However, investors need to be cautious, as there is always the risk of investing in a company after a significant rally.
Transocean Ltd Stock Analysis:
Transocean Ltd’s stock is expected to reach an average target price of USD 6.42 over the next 12 months, based on forecasts from 8 analyst ratings who rate the stock as a Strong Buy. However, Stock Target Advisor’s own analysis is Slightly Bearish, as it identifies 5 positive signals and 7 negative signals. At the previous closing, the stock was priced at USD 6.10. Over the past week, the stock price has declined by 19.84%, but it has increased by 1.50% over the past month and by 83.73% over the last year.
Company Overview
Transocean Ltd. (NYE:RIG) is a global provider of offshore contract drilling services for oil and gas wells. The company owns and operates a fleet of 37 mobile offshore drilling units, including 27 ultra-deep water and 10 harsh environment floaters. Transocean serves a variety of clients, including integrated energy companies, government-owned or government-controlled oil companies, and other independent energy companies. The company was founded in 1926 and is headquartered in Steinhausen, Switzerland.
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