What Our Analysts Know About Transocean (RIG)

Transocean has moved -2.7% so far today on a volume of 9,801,608, compared to its average of 23,349,712. In contrast, the S&P 500 index moved -0.6%.

Over the last 52 weeks, the stock moved 65.4%, with a high of $5.56 and a low of $2.32. During this time, the stock outperformed the S&P 500 index by 85.5%. Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. The mid-cap Energy company has 5,000 full time employees and is based in Steinhausen, Switzerland. Transocean has not offered any dividends in the last year.

Negative Earnings and a Deeply Leveraged Balance Sheet:

2018-12-31 2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $3,018 $3,088 $3,152 $2,556
Revenue Growth n/a 2.3% 2.1% -18.9%
Gross Margins 72.9% 72.31% 75.22% 70.97%
Gross Margins Growth n/a -0.81% 4.02% -5.65%
Operating Margins 7.06% -3.24% 5.96% -1.96%
Operating Margins Growth n/a -145.89% 283.95% -132.89%
Earnings Per Share $-4.27 $-2.05 $-0.92 $-0.93
EPS Growth n/a 51.99% 55.12% -1.09%
Free Cash Flow (MM) $374 $-47 $133 $367
FCF Growth n/a -112.57% 382.98% 175.94%
Capital Expenditures (MM) $-184 $-387 $-265 $-208
Net Debt / EBITDA 5.91 6.45 5.69 6.57

The Market Is Fairly Valuing Transocean:

Compared to the Energy sector's average of 9.11, Transocean has a trailing twelve month price to earnings (P/E) ratio of -4.5 and, based on its Eps guidance of -0.18, an expected P/E ratio of -25.6.

The firm's price to earnings growth (PEG) is -1.53, because its current P/E ratio is negative — so in this case the PEG ratio is not a meaningful indicator of the company's valuation.

Transocean is undervalued in terms of its assets because its price to book (P/B) ratio is 0.3 compared to its sector average of 1.45.

Most of the Market Indicators on Transocean Are Negative:

11 analysts are following Transocean and have set target prices ranging from $3.5 to $8 per share. On average, they have given the company a rating of hold. At today's prices, RIG is trading -9.63% away from its average analyst target price of $5.09 per share, implying an analyst consensus of some upside potential for the stock.

The company has an unusually large proportion of its shares sold short since 18.5% of the company's shares are tied to short positions. Institutions own 58.3% of Transocean's shares, while the insider ownership rate stands at 7.22%. The biggest shareholder is the Vanguard Group, Inc. with a 8% stake in the company worth approximately $277,755,089.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.