What Do Wall Street Analysts Think about Transocean?

The Market has given a consensus rating of “sell” to Transocean (RIG). Of the 37 analysts covering the stock, only 5% have given it a “buy” recommendation, 35% have recommended a “hold,” and 60% have a “sell” rating. Transocean’s target price is $8.60, which implies a downside potential of 23%.

RBC Capital Markets and Pareto Securities issued Transocean’s highest target price of $14. Its lowest target price came from Piper Jaffray at $2.50.

Unlike Seadrill (SDRL) and Ocean Rig (ORIG), the number of analysts covering Transocean hasn’t declined since the start of the year. And unlike its peers, Transocean’s consensus rating of 2.1, which means a “sell,” at the start of the year, hasn’t changed much and now stands at 2.0. Now we’ll take a look at estimates for Transocean by some prominent investment houses.

• Morgan Stanley has set a target price of $9.50, which implies a downside return of 14%. On the other hand, Morgan Stanley’s target price of $6 for prominent offshore driller (OIH) Seadrill (SDRL) implies a positive return of 87%.
• Barclays has set an “underweight” recommendation on Transocean with a target price of $6, which implies a return of -44%. Barclays has given a target price to Ocean Rig (ORIG) of $0.50, which implies a target return of -79%.
• Credit Suisse has set an “underperform” recommendation on Transocean with a target price of $5, which implies a return of -53%. Credit Suisse’s target price for Diamond Offshore Drilling (DO) also implies a negative return. Its target price for Rowan Companies (RDC) implies a positive return.