Transocean LTD (RIG)
NYSE:RIG
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Transocean
(NYSE:RIG)
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Rating:63Neutral
Price Target:
$6.50
▲(9.43% Upside)
Action:ReiteratedDate:04/17/26
The score is driven primarily by improving fundamentals—strong 2025 operating cash flow/free cash flow and declining debt—plus a constructive earnings outlook and backlog-building events. The key constraint remains persistent net losses (negative P/E) and only mixed near-term technical momentum (below 20D/50D averages, RSI in the low-40s).
Positive Factors
Sustained Free Cash Flow
Transocean converted improving operations into durable cash generation in 2025 (FCF $626M; Q4 margin 31%). Sustained positive free cash flow improves capital allocation flexibility for maintenance, deleveraging, and targeted reinvestment in high‑spec assets, supporting multi‑year operational plans.
Negative Factors
Persistent Net Losses & Impairments
Large non‑cash impairments and recurring net losses weaken returns to equity holders and signal structural overcapacity or carryover legacy book issues. Even with operating recovery, heavy below‑the‑line charges can compress retained earnings and limit restoration of positive reported profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Free Cash Flow
Transocean converted improving operations into durable cash generation in 2025 (FCF $626M; Q4 margin 31%). Sustained positive free cash flow improves capital allocation flexibility for maintenance, deleveraging, and targeted reinvestment in high‑spec assets, supporting multi‑year operational plans.
Read all positive factors
Transocean (RIG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.76B
Dividend YieldN/A
Average Volume (3M)32.93M
Price to Earnings (P/E)―
Beta (1Y)1.02
Revenue Growth12.51%
EPS Growth-435.32%
CountryUS
Employees5,470
SectorEnergy
Sector Strength52
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)0.02
Shares Outstanding1,106,750,600
10 Day Avg. Volume26,481,331
30 Day Avg. Volume32,927,466
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 Cap1.51
Enterprise Value/Revenue2.57
Enterprise Value/Gross Profit11.31
Enterprise Value/Ebitda-20.69
Forecast
1Y Price Target
$7.03Price Target Upside18.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.2
Revenue Forecast (FY)$3.87B
Transocean Business Overview & Revenue Model
Company Description
Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts its mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. As of Febr...
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 contract drilling revenue, which is typically earned based on dayrate pricing (a fix...
Transocean Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call highlighted material financial and operational improvements — strong adjusted EBITDA (+~20% YoY), best-in-several-years quarterly free cash flow, significant debt reduction, record uptime (~98%), and a strategic, transformative acquisition of Valaris with sizable pro forma backlog and identified synergies. Headwinds include some near-term assumed idle time on specific rigs, slower-than-expected award timing in late 2025, and ongoing Petrobras negotiations. Overall, the positive financial momentum, improved liquidity and clear pathway to deleveraging and higher utilization outweigh the limited near-term execution and timing risks.Positive Updates
Strong Adjusted EBITDA and Margins
Q4 adjusted EBITDA of $385,000,000 with an implied margin of 37%. Full-year adjusted EBITDA of $1,370,000,000, up nearly 20% year-over-year.
Negative Updates
Near-Term Activity Assumptions and Idle Time
2026 guidance assumes slightly lower activity versus 2025 with some idle time on several rigs (KG2, Deepwater Proteus, Deepwater Skiros), creating downside to revenue if idle periods persist.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Adjusted EBITDA and Margins
Q4 adjusted EBITDA of $385,000,000 with an implied margin of 37%. Full-year adjusted EBITDA of $1,370,000,000, up nearly 20% year-over-year.
Read all positive updates
Company Guidance
Transocean's guidance for Q1 and full‑year 2026 assumes some idle time on the KG2, Deepwater Proteus and Deepwater Skiros but still targets 2026 free cash flow in line with or better than 2025's $626 million, plans to opportunistically reduce debt beyond a remaining 2026 scheduled obligation of about $380 million (≈$130 million already paid), and expects year‑end 2026 liquidity of $1.6–$1.7 billion (current liquidity ≈$1.5 billion: cash $620M, restricted $377M, $510M undrawn). That outlook is supported by Q4 results — contract drilling revenue $1.04B, average daily revenue ≈$461K, adjusted EBITDA $385M (37% margin), cash from operations ≈$349M (+42% q/q), free cash flow $321M (31% margin) after $28M capex — plus a standalone backlog of ≈$6B (pro forma ≈$11B with Valaris), identified GBP>200M synergies, $100M of cost savings realized in 2025 and a further $150M targeted in 2026, reduced annual interest expense of ~ $90M and an expected pro forma leverage of ~1.5x within 24 months as deepwater utilization moves to >90% through 2027.Transocean Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
56
Neutral
Cash Flow
69
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.96B | 3.52B | 2.83B | 2.58B | 2.56B |
| Gross Profit | 900.00M | 1.35B | 872.00M | 907.00M | 871.00M |
| EBITDA | -1.73B | 1.14B | 732.00M | 844.00M | 930.00M |
| Net Income | -2.92B | -512.00M | -954.00M | -621.00M | -591.00M |
Balance Sheet | |||||
| Total Assets | 15.64B | 19.37B | 20.25B | 20.44B | 20.68B |
| Cash, Cash Equivalents and Short-Term Investments | 997.00M | 560.00M | 995.00M | 683.00M | 976.00M |
| Total Debt | 5.66B | 7.25B | 7.85B | 7.82B | 7.69B |
| Total Liabilities | 7.53B | 9.09B | 9.84B | 9.64B | 9.47B |
| Stockholders Equity | 8.11B | 10.28B | 10.41B | 10.79B | 11.21B |
Cash Flow | |||||
| Free Cash Flow | 626.00M | 193.00M | -263.00M | -269.00M | 367.00M |
| Operating Cash Flow | 749.00M | 447.00M | 164.00M | 448.00M | 575.00M |
| Investing Cash Flow | -33.00M | -151.00M | -423.00M | -757.00M | -233.00M |
| Financing Cash Flow | -660.00M | -350.00M | 263.00M | -112.00M | -490.00M |
Transocean Technical Analysis
Neutral
5.94
Price Trends
6.31
Negative
5.33
Positive
4.30
Positive
Market Momentum
-0.01
Positive
39.88
Neutral
17.12
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RIG, the sentiment is Neutral. The current price of 5.94 is below the 20-day moving average (MA) of 6.53, below the 50-day MA of 6.31, and above the 200-day MA of 4.30, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 39.88 is Neutral, neither overbought nor oversold. The STOCH value of 17.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RIG.
Transocean Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $6.31B | 3.62 | 38.72% | ― | 0.27% | 171.02% | |
68 Neutral | $1.32B | 2.88 | 57.72% | ― | 8.69% | ― | |
67 Neutral | $1.75B | 23.49 | 4.41% | 5.99% | 1.01% | -43.28% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
63 Neutral | $6.76B | -1.36 | -32.62% | ― | 12.51% | -435.32% | |
58 Neutral | $3.83B | -7.33 | -11.45% | 3.24% | 48.21% | -205.00% | |
56 Neutral | $2.99B | -54.06 | -2.68% | ― | 3.75% | -119.04% |
* Energy Sector Average
RIG
Transocean
6.11
3.80
164.50%
HP
Helmerich & Payne
38.36
19.39
102.22%
NBR
Nabors Industries
89.89
60.50
205.85%
BORR
Borr Drilling
5.69
3.85
209.24%
VAL
Valaris
91.19
58.54
179.30%
SDRL
Seadrill Limited
48.10
27.99
139.18%
Transocean Corporate Events
Business Operations and Strategy
Transocean Adds Major Ultra-Deepwater Contract, Boosting Backlog
Positive
Apr 16, 2026
On April 16, 2026, Transocean Ltd. announced that its ultra-deepwater drillship Deepwater Asgard secured a five-well contract in the Eastern Mediterranean Sea with an undisclosed operator. The 390-day campaign, expected to begin in the fourth quar...
Business Operations and Strategy
Transocean Secures Major Petrobras Ultra-Deepwater Contract Extension
Positive
Apr 14, 2026
On April 14, 2026, Transocean said its ultra-deepwater drillship Deepwater Corcovado secured a 1,156-day contract extension from Petrobras, in direct continuation of its current work. The deal adds about $445 million to Transocean’s backlog ...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Transocean Adds $1 Billion to Backlog with New Contracts
Positive
Apr 2, 2026
Transocean announced on April 2, 2026 that it secured a new long-term contract in Norway and multi-year extensions in Brazil, adding about $1.0 billion to its firm contract backlog. The Transocean Barents won a 1,095-day harsh-environment deal wit...
Financial DisclosuresRegulatory Filings and Compliance
Transocean Receives Unqualified Audit Opinion on Financial Statements
Positive
Feb 23, 2026
On February 23, 2025, Transocean’s statutory auditor Ernst Young Ltd. issued an unqualified opinion on the company’s consolidated financial statements for the years ended December 31, 2025, 2024 and 2023. The auditor concluded the acc...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Transocean Reports Strong 2025 Results Amid Net Loss
Neutral
Feb 20, 2026
On February 19, 2026, Transocean reported its fourth-quarter and full-year 2025 results, highlighting a 13% rise in operating revenues to $3.965 billion and revenue efficiency of 96.5%. Adjusted EBITDA increased 19% to $1.37 billion, cash flow fro...
Business Operations and Strategy
Transocean Expands Norwegian Backlog With New Rig Contracts
Positive
Feb 11, 2026
Transocean Ltd. has secured new contract fixtures for two of its harsh environment semisubmersible rigs operating in Norway, adding approximately $184 million to its firm contract backlog. The Transocean Encourage received a seven-well contract ex...
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Transocean to Acquire Valaris in All-Stock Merger
Positive
Feb 10, 2026
On February 9, 2026, Transocean and Valaris agreed to an all-stock business combination in which Transocean will acquire all outstanding Valaris shares via a Bermuda court-approved scheme of arrangement, offering 15.235 Transocean shares for each ...
Business Operations and StrategyM&A Transactions
Transocean to Acquire Valaris in All-Stock Merger
Positive
Feb 9, 2026
On Feb. 9, 2026, Transocean and Valaris unveiled a definitive all-stock merger agreement in which Transocean will acquire all Valaris shares in a deal valued at about $5.8 billion, creating a combined offshore driller with an enterprise value near...
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.