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Wednesday, September 30, 2020

The Forecast Just Changed on Transocean Ltd. (NYSE:RIG)

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The Transocean Ltd. (RIG) shares are trading at lower $1.96 and the avg recommendation for the stock is Hold. while the current analyst price target stands at $2.78.

To add more color to this target, the company’s high over the last year is $7.28 and the low is $0.76. Over the last 52 weeks, RIG is down -73.08% while the S&P 500 is up 0.29%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, RIG reported a profit of $-199.0 million. Transocean Ltd. also saw revenues decrease to $759.0 million. In addition, RIG has free cash flow of -$155.0 million as of 03-2020. The company’s EBITDA came in at $55.0 million which compares well with its peers.

RIG booked profit margins of -47.70%, its Return on Equity (ROE) is -12.30%, and its Return on Assets is -6.00%. All told, it is clear that, RIG needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. RIG has a short ratio of 2.64 and outstanding shares of 614.00M.

Company Outlook

RIG has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 19.52 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -2.41. Transocean Ltd. RIG also noted assets of $23.45 billion at the end of the last quarter. Investors should also keep an eye on sector updates as RIG has historically followed its peers on positive news.

All told, Transocean Ltd. RIG has strung together solid data and demonstrated underlying fundamentals. At its current valuation, RIG represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Transocean Ltd. RIG is now commanding a market cap of 1.30B and a float of 575.53M. RIG is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of RIG stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in RIG, either long or short, and we have not been compensated for this article.

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