Transocean (NYSE:RIG) Shares Climb 5.3% - Should You Buy?

Key Points

• Transocean shares rose 5.3% to $6.405, though trading volume was about 92% below the stock’s average daily volume.
• Analyst sentiment remains mixed: the consensus rating is “Hold” with a $6.68 price target, while individual firms range from “sell” to “strong buy.”
• Transocean beat quarterly earnings and revenue expectations, but revenue fell 2.2% year over year and the company posted a negative 40.24% net margin. Institutional investors own 67.73% of the stock, with several major funds increasing their positions.

Transocean Ltd. (NYSE:RIG - Get Free Report) shares were up 5.3% during trading on Friday. The stock traded as high as $6.29 and last traded at $6.4050. Approximately 3,168,961 shares traded hands during trading, a decline of 92% from the average daily volume of 40,577,801 shares. The stock had previously closed at $6.08.

Analysts Set New Price Targets

A number of research analysts recently weighed in on the stock. Susquehanna decreased their target price on shares of Transocean from $8.00 to $7.00 and set a "positive" rating for the company in a research report on Wednesday, July 8th. Zacks Research raised shares of Transocean from a "hold" rating to a "strong-buy" rating in a research report on Monday, October 5th. Weiss Ratings restated a "sell (d-)" rating on shares of Transocean in a research note on Thursday, October 15th. Fearnley Fonds upgraded Transocean from a "hold" rating to a "strong-buy" rating in a report on Friday, August 7th. Finally, Barclays lowered their target price on Transocean from $8.00 to $7.00 and set an "overweight" rating on the stock in a research report on Wednesday, August 12th. Two equities research analysts have rated the stock with a Strong Buy rating, three have given a Buy rating, four have given a Hold rating and three have assigned a Sell rating to the company. According to data from MarketBeat.com, the company presently has an average rating of "Hold" and a consensus target price of $6.68.

Transocean Trading Up 7.0%

The company has a market cap of $7.27 billion, a price-to-earnings ratio of -3.46, a P/E/G ratio of 4.47 and a beta of 1.41. The company has a debt-to-equity ratio of 0.56, a quick ratio of 1.27 and a current ratio of 1.59. The firm has a fifty day moving average price of $5.67 and a 200 day moving average price of $5.80.

Transocean (NYSE:RIG - Get Free Report) last released its earnings results on Wednesday, August 5th. The offshore drilling services provider reported $0.03 earnings per share for the quarter, beating the consensus estimate of $0.01 by $0.02. The business had revenue of $966.00 million during the quarter, compared to analysts' expectations of $956.64 million. Transocean had a negative net margin of 40.24% and a positive return on equity of 2.60%. The firm's revenue was down 2.2% on a year-over-year basis. During the same period last year, the business earned ($1.06) earnings per share. As a group, equities analysts predict that Transocean Ltd. will post 0.18 EPS for the current fiscal year.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of RIG. Dimensional Fund Advisors LP increased its stake in shares of Transocean by 12.3% during the 1st quarter. Dimensional Fund Advisors LP now owns 48,819,576 shares of the offshore drilling services provider's stock worth $323,682,000 after purchasing an additional 5,349,264 shares during the last quarter. State Street Corp lifted its stake in Transocean by 8.7% in the 2nd quarter. State Street Corp now owns 27,148,850 shares of the offshore drilling services provider's stock valued at $132,758,000 after purchasing an additional 2,166,646 shares during the last quarter. Elliott Investment Management L.P. bought a new position in Transocean during the first quarter worth about $103,606,000. Keybank National Association OH grew its holdings in Transocean by 3.3% during the first quarter. Keybank National Association OH now owns 12,656,881 shares of the offshore drilling services provider's stock worth $83,915,000 after purchasing an additional 405,804 shares during the period. Finally, Bank of New York Mellon Corp grew its holdings in Transocean by 67.8% during the first quarter. Bank of New York Mellon Corp now owns 5,698,827 shares of the offshore drilling services provider's stock worth $37,783,000 after purchasing an additional 2,303,297 shares during the period. Institutional investors own 67.73% of the company's stock.

About Transocean

Transocean Ltd. is an offshore drilling contractor that provides drilling services to international oil and gas companies. The company specializes in ultra-deepwater and harsh-environment drilling, helping customers explore for and develop offshore energy resources.

Transocean owns and operates a fleet of mobile offshore drilling units, including ultra-deepwater drillships and semisubmersible rigs. Its services generally include contract drilling, rig operations, well-construction support, and related offshore drilling management.

With roots tracing back to the 1920s, Transocean serves customers in major offshore energy regions around the world.

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