Market Overview

Credit Suisse Just Downgraded Transocean, And Shares Are Falling

Credit Suisse Just Downgraded Transocean, And Shares Are Falling
Related RIG
27 Stocks Moving In Thursday's Pre-Market Session
Benzinga's Top Upgrades, Downgrades For April 4, 2018
Transocean wins work for four semi-submersibles (Seeking Alpha)

In a report published Tuesday, Credit Suisse analyst Gregory Lewis downgraded his rating on Transocean LTD (NYSE: RIG) from Neutral to Underperform, but reiterated a $12.00 price target.

In the report, Credit Suisse noted it is "downgrading to Underperform (from Neutral) and maintaining [a] $12 TP.

"Our $12 TP is 6x our 2016 EBITDA estimate," they add. "The down-cycle should be more painful for RIG than most owing to its mix of some new and a lot of old rigs. RIG has ten idle floaters (3 in GoM, 2 in WAFA, 3 in SE Asia, 1 in NSea, 1 in transit) – accounting for 15% of RIG's 2014 revenue."

Related Link: Which Oil Majors Have The Closest Correlation To Oil?

The firm estimates 54 percent of its 2014 revenue is "at risk" over the next two years, "mainly due to floater contract roll-offs." Credit Suisse expects Transocean to stockpile rigs through 2016.

"Tough times ahead," the analyst concludes.

Transocean closed on Monday at $20.44, up 10 percent. Shares are down more than 3 percent in Tuesday's pre-market trading.

Image credit: Public Domain

Latest Ratings for RIG

Apr 2018Bank of AmericaMaintainsNeutralNeutral
Apr 2018HSBCUpgradesHoldBuy
Jan 2018JefferiesUpgradesHoldBuy

View More Analyst Ratings for RIG
View the Latest Analyst Ratings

Posted-In: Credit Suisse Gregory LewisAnalyst Color Downgrades Previews Top Stories Analyst Ratings Trading Ideas Best of Benzinga


Related Articles (RIG)

View Comments and Join the Discussion!