Bank of America just raised its EUR/USD forecast
On Monday, JPMorgan reiterated a Neutral rating with a price target of $5.00 on Transocean (NYSE:RIG) shares, representing approximately 56% upside from the current price of $3.20. According to InvestingPro data, analyst targets range from $3.50 to $6.00, with the stock currently trading at a notably low Price/Book multiple of 0.27. The firm’s assessment followed Transocean’s strong performance since its fourth-quarter 2024 earnings report released in mid-February. Transocean, an offshore drilling contractor, has seen near full contract coverage for its active fleet in 2025, with expectations to enter 2026 with 93% marketed utilization.
According to JPMorgan, Transocean’s management has secured a contract for the Deepwater Mykonos for the remainder of the year. The rig is currently under contract with Petrobras until October 2025. Additionally, Transocean is in discussions to extend the Deepwater Conqueror’s work in the Gulf of Mexico beyond its current contract with Chevron (NYSE:CVX), which concludes in April.
However, the company is exercising caution regarding the West Africa market, where a supply imbalance is anticipated to continue through 2025. The majority of new drilling programs in the region are not slated to begin until 2026-27. With a current ratio of 1.47, Transocean maintains sufficient liquidity to weather market uncertainties. Conversely, Transocean anticipates that Norway could provide a robust market, with demand possibly requiring up to two additional rigs that would need to be sourced from other markets in 2026.
On the fourth-quarter 2024 earnings call, Transocean’s management mentioned that the sale of its idle sixth-generation assets, specifically the Development Driller III and Discoverer Inspiration, did not reach completion. These assets are now classified as held-for-sale. With an EBITDA of $1.14 billion in the last twelve months, Transocean is currently exploring sale opportunities for these rigs and is also considering other cost-saving alternatives, such as scrapping. For deeper analysis of Transocean’s asset strategy and financial metrics, explore the full suite of tools and insights available on InvestingPro.
In other recent news, Transocean Ltd . disclosed its annual financial results for 2024, providing a comprehensive overview of its financial performance over the past three years. The company reported a net income of $7 million for Q4 2024, translating to a loss of $0.11 per diluted share, missing the expected earnings per share (EPS) forecast of $0.0029. Contract drilling revenues for the quarter were $952 million, slightly below the forecast of $961.51 million. Despite missing EPS expectations, Transocean achieved an adjusted EBITDA of $323 million and highlighted its best-ever safety performance. Looking forward, Transocean projects 2025 contract drilling revenues between $3.85 billion and $3.95 billion, indicating a robust outlook despite recent challenges. Analyst firm Benchmark maintained a Hold rating on Transocean’s stock, noting the stability in pricing for its specialized drillships, which continue to command strong day rates. This pricing resilience is a key factor in Transocean’s revenue generation, particularly for its high-specification fleet.
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