Transocean (NYSE:RIG) Shares Gap Down - What's Next?

Key Points

• Transocean shares fell sharply at the open, dropping from a prior close of $6.94 to $6.65 and last trading near $6.60 on heavy volume.
• Analyst sentiment is mixed: the stock has an average “Hold” rating and a consensus price target of $6.68, though some firms upgraded it to “Strong Buy” while others maintained bearish views.
• Transocean modestly exceeded quarterly earnings and revenue expectations, but revenue declined 2.2% year over year and the company continued to report a sizable negative net margin of 40.24%.

Transocean Ltd. (NYSE:RIG - Get Free Report)'s share price gapped down before the market opened on Monday. The stock had previously closed at $6.94, but opened at $6.65. Transocean shares last traded at $6.5950, with a volume of 12,437,847 shares trading hands.

Wall Street Analysts Forecast Growth

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

Transocean Price Performance

The company has a market capitalization of $7.16 billion, a P/E ratio of -3.42, a price-to-earnings-growth ratio of 5.08 and a beta of 1.41. The business's 50-day moving average is $5.76 and its two-hundred day moving average is $5.83. The company has a quick ratio of 1.27, a current ratio of 1.59 and a debt-to-equity ratio of 0.56.

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

Institutional Investors Weigh In On Transocean

Large investors have recently made changes to their positions in the business. Commonwealth Equity Services LLC purchased a new position in Transocean in the third quarter valued at approximately $310,000. Costello Asset Management INC purchased a new stake in Transocean in the third quarter worth $33,000. Arlington Capital Management INC increased its position in Transocean by 1.7% in the third quarter. Arlington Capital Management INC now owns 543,619 shares of the offshore drilling services provider's stock worth $2,849,000 after buying an additional 9,320 shares during the last quarter. Greenfield Seitz Capital Management LLC bought a new stake in shares of Transocean in the third quarter valued at $83,000. Finally, SilverOak Wealth Management LLC bought a new stake in shares of Transocean in the third quarter valued at $54,000. 67.73% of the stock is owned by hedge funds and other institutional investors.

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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