Citi analyst Scott Gruber upgraded Transocean to Buy from Neutral with a price target of $9.50, up from $6.50. The offshore rig markets have witnessed a “swift recovery” with floater day-rates up three-times from the bottom, the analyst tells investors in a research note. The firm sees offshore oil and gas investment recovering back to the 2017-2018 levels, driven by activity levels in the Golden Triangle and in the Middle East. The higher activity should see demand for floating rigs rising 13% from the current levels, contends Citi. It believes companies with short-term contracts will benefit. The analyst shifted to valuing Transocean on 2025 EBITDA, saying the company’s contract book is expanding and the investment debate has shifted to this year.
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