NEW YORK (TheStreet) -- Transocean(RIG) - Get Report stock is slumping 6.07% to $13.93 in midday trading on Friday, as oil prices fall after Goldman Sachs cut its 2016 forecast.

Goldman Sachs cut its 2016 forecast for U.S. crude to $45 a barrel from $57 and Brent to $49.50 from $62, noting the supply glut and China's economic downturn, Reuters reports. The firm also said that U.S. oil could dip to $38 per barrel during the upcoming month.

Additionally, oversupply concerns continue to weigh on oil prices. Data released by the Energy Information Administration yesterday showed that U.S. stockpiles rose 2.6 million barrels to 458 million barrels last week, and OPEC and non-OPEC producers indicated that they will not cooperate to cut production despite the global oversupply, The Wall Street Journal reports.

WTI crude is down 2.33% to $44.85 per barrel, while Brent crude is retreating 1.33% to $48.24 per barrel this afternoon, according to the CNBC.com index.

Separately, TheStreet Ratings team rates TRANSOCEAN LTD as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate TRANSOCEAN LTD (RIG) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Energy Equipment & Services industry. The net income has significantly decreased by 41.7% when compared to the same quarter one year ago, falling from $587.00 million to $342.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, TRANSOCEAN LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 64.84%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 42.94% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • TRANSOCEAN LTD's earnings per share declined by 42.9% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TRANSOCEAN LTD swung to a loss, reporting -$5.25 versus $3.85 in the prior year. This year, the market expects an improvement in earnings ($3.32 versus -$5.25).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 22.3%. Since the same quarter one year prior, revenues fell by 19.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: RIG Ratings Report