"RIG has the biggest contracting challenges both near-term and in the longer-run given a disproportionate mix of older UDW/UK floaters and thus estimates are too high and shares screen worst relative to fair value ($20 PT)," analysts said in a note covering nine offshore drillers that rated Transocean as its "least preferred."
"Despite the massive sell-off in shares (53% YTD as of November 28), we do not yet believe it is time to be long the offshore drilling subsector, as neither fundamentals nor valuation paint a compelling enough picture of the group" analysts added.
Shares of Transocean are up 0.62% to $19.50 in pre-market trading.
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 and generally disappointing historical performance in the stock itself."