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UPDATE: Wunderlich Initiates Coverage on Transocean Ahead of Expected Estimate Reductions

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In a report published Wednesday, Wunderlich Securities analyst Todd P. Scholl initiated coverage on Transocean Ltd. (NYSE: RIG) with a Hold rating and $51.00 price target.

In the report, Transocean Ltd. noted, “We are initiating coverage of Transocean ltd (RIG) with a Hold rating and a target of $51, which represents a 5.4x 2015 EV/EBITDA multiple. We believe current consensus estimates for 2014 and 2015 will likely be reduced as the result of downtime additions and lower-than-estimated dayrate revisions as contracts roll, particularly relating to some of the company's 4th/5th generation deepwater assets. Transocean has done an excellent job in the past 18 months of high grading its fleet by divesting of older lower spec assets, including its standard jack-up business, and by adding high spec newbuild rigs, including four drillships. We believe increasing the company's dividend is a positive but, at current levels, more attractive opportunities exist elsewhere in the offshore drilling space.”

Transocean Ltd. closed on Tuesday at $45.32.

Posted-In: Todd P. Scholl Wunderlich SecuritiesAnalyst Color Initiation Analyst Ratings

 

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