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Transocean
(NYSE:RIG)
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Rating:54Neutral
Price Target:
$5.50
▼(-4.18% Downside)
Action:Reiterated
Date:09/15/26
The score is held back primarily by weak financial performance (large losses and a sharp TTM revenue decline) and a bearish technical picture (trading below key moving averages). Offsetting factors include strong recent cash-flow generation and a series of positive contract/backlog announcements that improve forward revenue visibility, but valuation support is limited given negative earnings and no dividend yield provided.
Positive Factors
Growing deepwater backlog
New work for a premium ultra-deepwater drillship improves forward revenue visibility and supports utilization of a high-specification asset. Because the campaign follows existing operations and extends into 2027, it strengthens contracted activity beyond the immediate reporting period.
Negative Factors
Persistent large net losses
Deep and recurring net losses show that strong gross margins have not yet translated into sustainable bottom-line profitability. Continued losses can constrain retained capital, reduce the ability to self-fund growth and leave earnings highly exposed to utilization, contract and operating-cost changes.
Read all positive and negative factors
Positive Factors
Negative Factors
Growing deepwater backlog
New work for a premium ultra-deepwater drillship improves forward revenue visibility and supports utilization of a high-specification asset. Because the campaign follows existing operations and extends into 2027, it strengthens contracted activity beyond the immediate reporting period.
Read all positive factors
Transocean Key Performance Indicators (KPIs)
Any
Operating Days
Counts the total days rigs were operating under contract across the fleet, a direct driver of topline revenue and near-term cash flow. Rising operating days point to stronger demand and revenue visibility; falling days can reflect downtime, maintenance, seasonality, or weak market conditions.
Counts the total days rigs were operating under contract across the fleet, a direct driver of topline revenue and near-term cash flow. Rising operating days point to stronger demand and revenue visibility; falling days can reflect downtime, maintenance, seasonality, or weak market conditions.
Data provided by:
The Fly
The FlyTransocean (RIG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.19B
Dividend Yield14.08%
Average Volume (3M)41.66M
Price to Earnings (P/E)―
Beta (1Y)0.95
Revenue Growth8.54%
EPS Growth-3.69%
CountryUS
Employees5,220
SectorEnergy
Sector Strength52
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)-1.84
Shares Outstanding1,116,880,100
10 Day Avg. Volume42,291,157
30 Day Avg. Volume41,657,207
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.49
Price to Sales (P/S)1.00
P/FCF Ratio6.33
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$7.08Price Target Upside23.26% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.23
Revenue Forecast (FY)$3.91B
Transocean Business Overview & Revenue Model
Company Description
Transocean Ltd., in conjunction with its subsidiaries, offers specialized contract drilling services for oil and natural gas wells throughout the world. The company provides mobile offshore drilling rigs, all necessary equipment, and skilled workf...
How the Company Makes Money
Transocean primarily makes money by contracting its offshore drilling rigs and crews to oil and gas companies under drilling contracts. The core revenue stream is dayrate-based contract drilling revenue, where customers pay a contracted daily rate...
Transocean Earnings Call Summary
Earnings Call Date:May 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call communicated strong operational execution, robust profitability (Adjusted EBITDA $440M, >40% margin), meaningful backlog growth (~$1.6B incremental; backlog >$7B), improved market visibility with deepwater utilization expected near 100% by 2027, and deliberate balance-sheet improvements (early debt retirements and targeted cost savings). Counterpoints include an antitrust second request on the Valaris acquisition that introduces potential timing/risk, a modest $50M reduction to the upper revenue outlook, modestly higher capex and emerging inflationary pressures (fuel +~100%, freight +30%–50%) and continued reactivation economics that keep some assets cold-stacked. Overall, positive operational and financial momentum outweighs the identified risks, though timing and macro-driven cost pressures warrant monitoring.Positive Updates
Strong operational performance and safety
Operational uptime of 98% in the quarter; zero life-changing injuries or operational integrity events, reflecting high operational reliability and safety performance.
Negative Updates
Regulatory review risk for Valaris acquisition
Received a second request for additional information from the U.S. Department of Justice as part of the antitrust review for the Valaris acquisition; while management remains confident in approval and a 2026 close, the second request introduces timing uncertainty and the potential for remedies or extended review.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong operational performance and safety
Operational uptime of 98% in the quarter; zero life-changing injuries or operational integrity events, reflecting high operational reliability and safety performance.
Read all positive updates
Company Guidance
On guidance, management made only modest standalone updates: the upper end of 2026 revenue guidance was lowered by $50 million to $3.9 billion and full-year capital expenditures were increased by $20 million (about half for a Norway exhaust upgrade recoverable under contract); Q1 outperformance included contract drilling revenue of $1.08 billion, revenue efficiency >97% (versus guidance of 90.5%, worth ~$9 million), adjusted EBITDA of $440 million (margin >40%), operating cash flow of $164 million and free cash flow of $136 million after $28 million of capex. Liquidity and leverage guidance: unrestricted cash was $330 million at quarter end (≈$495 million as of May 4), total liquidity was ~$1.1 billion (post-Titan retirement) with year-end standalone liquidity expected at $1.25–1.35 billion; debt principal remaining ≈$5.1 billion (after an opportunistic $358 million note retirement saving nearly $40 million of interest), the company expects to retire at least $750 million of debt in 2026 to end the year near $4.9 billion, and reported trailing 12‑month net debt/adjusted EBITDA of ~3.1x (implying ~3.3x at year-end on consensus EBITDA). Finally, management reiterated targets to deliver $250 million of cost savings versus 2024 through 2026 (plus >$200 million of Valaris synergies pro forma), and highlighted firm backlog and coverage of >$7 billion and 86%/73% contract coverage for 2026/2027 (pro forma backlog ≈$12 billion).Transocean Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
56
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.12B | 3.96B | 3.52B | 2.83B | 2.58B | 2.56B |
| Gross Profit | 3.06B | 3.31B | 2.79B | 2.09B | 1.84B | 1.81B |
| EBITDA | -464.00M | -1.73B | 582.00M | 501.00M | 851.00M | 939.00M |
| Net Income | -1.66B | -2.92B | -512.00M | -954.00M | -621.00M | -592.00M |
Balance Sheet | ||||||
| Total Assets | 15.17B | 15.64B | 19.37B | 20.25B | 20.44B | 20.68B |
| Cash, Cash Equivalents and Short-Term Investments | 509.00M | 997.00M | 560.00M | 995.00M | 683.00M | 976.00M |
| Total Debt | 5.12B | 5.66B | 7.25B | 7.85B | 7.82B | 7.69B |
| Total Liabilities | 6.80B | 7.53B | 9.09B | 9.84B | 9.64B | 9.47B |
| Stockholders Equity | 8.37B | 8.11B | 10.28B | 10.41B | 10.79B | 11.21B |
Cash Flow | ||||||
| Free Cash Flow | 904.00M | 626.00M | 193.00M | -263.00M | -269.00M | 367.00M |
| Operating Cash Flow | 995.00M | 749.00M | 447.00M | 164.00M | 448.00M | 575.00M |
| Investing Cash Flow | 22.00M | -33.00M | -151.00M | -423.00M | -757.00M | -233.00M |
| Financing Cash Flow | -994.00M | -660.00M | -350.00M | 263.00M | -112.00M | -490.00M |
Transocean Technical Analysis
Negative
5.74
Price Trends
5.53
Positive
5.81
Negative
5.62
Positive
Market Momentum
0.02
Positive
48.97
Neutral
36.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RIG, the sentiment is Negative. The current price of 5.74 is below the 20-day moving average (MA) of 5.80, above the 50-day MA of 5.53, and above the 200-day MA of 5.62, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 48.97 is Neutral, neither overbought nor oversold. The STOCH value of 36.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RIG.
Transocean Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $4.16B | -29.61 | -5.27% | 2.41% | 16.57% | -328.07% | |
67 Neutral | $5.73B | 6.24 | 31.33% | 0.68% | -13.22% | 249.28% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
63 Neutral | $2.98B | 2,405.50 | 0.03% | 14.83% | 13.06% | -98.53% | |
60 Neutral | $1.30B | 5.85 | 36.75% | 10.09% | 6.05% | ― | |
54 Neutral | $6.19B | -3.08 | -20.24% | 14.08% | 8.54% | -3.69% | |
52 Neutral | $1.31B | -5.61 | -21.28% | 5.20% | 2.71% | -447.50% |
* Energy Sector Average
RIG
Transocean
5.66
2.34
70.48%
HP
Helmerich & Payne
41.46
21.50
107.73%
NBR
Nabors Industries
86.85
49.23
130.86%
BORR
Borr Drilling
4.36
1.41
47.80%
VAL
Valaris
84.05
33.72
67.00%
SDRL
Seadrill Limited
48.11
17.10
55.14%
Transocean Corporate Events
Business Operations and Strategy
Transocean adds new ultra-deepwater contract, expanding backlog
Positive
Sep 15, 2026
On September 15, 2026, Transocean Ltd. announced that its ultra-deepwater drillship Deepwater Conqueror has secured a two-well contract in Equatorial Guinea with an undisclosed operator. The campaign, estimated to last about 170 days, is scheduled...
Business Operations and Strategy
Transocean Wins Two-Year Ultra-Deepwater Drillship Award
Positive
Aug 20, 2026
On August 20, 2026, Transocean Ltd. announced that it has secured a two-year binding Letter of Award from India’s ONGC for its ultra-deepwater drillship Dhirubhai Deepwater KG2. The campaign, scheduled to start in the first quarter of 2027, ...
Business Operations and StrategyFinancial Disclosures
Transocean Delivers Strong Q2 2026 Results, Boosts Backlog
Positive
Aug 5, 2026
On August 5, 2026, Transocean reported second-quarter 2026 results, posting contract drilling revenues of $966 million, net income of $170 million and adjusted EBITDA of $312 million, supported by revenue efficiency of 97.0%. The company generated...
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
Transocean Wins Equinor Contract, Expanding Norwegian Rig Backlog
Positive
Jul 1, 2026
On June 30, 2026, Transocean Ltd. said it had entered into a conditional agreement with Equinor to deploy three harsh-environment “Cat D” semisubmersible rigs on the Norwegian shelf, adding more than $1 billion to its contract backlog ...
Business Operations and StrategyFinancial Disclosures
Transocean Secures Major New Offshore Drilling Contracts
Positive
Jun 16, 2026
On June 16, 2026, Transocean Ltd. announced new contract awards for two of its harsh-environment semisubmersible rigs, adding about $185 million to its firm contract backlog and reinforcing utilization of its high-specification fleet. The awards u...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.