2024-03-17 03:32:37 ET
Transocean (NYSE: RIG) stock price is not doing well in 2023. It has already dropped by almost 9% this year, lagging the S&P 500 and Nasdaq 100 indices that have surged to their record highs. The stock has fallen by more than 35% in the past five years.
Transocean lowered estimates
Transocean is a major player in the energy sector. It is one of the few companies that take some of the toughest tasks in the industry. For example, it handles complicated rig solutions in the deep water and other harsh environments.
Transoacean had a relatively strong performance in 2023 as it received projects worth millions of dollars. It added over $880 million in backlog during the year, bringing its total to over $9 billion.. The company also improved its balance sheet by refinancing 4 senior secured notes worth $1.2 billion.
Its most recent results were not all that good though. Its revenue came in at $748 million, missing the analysts’ estimates by $20 million. The figure was also lower than its guidance, a situation the company blamed to its Deepwater Mykonos.
Transocean also provided a guidance that was weaker than estimates. It expects that its revenue will be $780 million . For 2024, the company expects that its drilling revenue will be between $3.6 billion and $3.75 billion.
Its guidance was lower than expected because of the crisis in the Middle East. It also blamed a delay of its Deepwater Orion and Transocean Endurance.
Looking ahead, Transocean stock price will depend on the ongoing trends in the oil and gas industry. On the positive side, the price of crude oil has remained at an elevated level in the past few weeks. While gas has dropped, there are signs that it is about to bottom.
The stock will also depend on the number of contracts won this year. I think that its backlog will grow at a slower pace than it did in 2023. The other benefit is that the company has deleveraged and is relatively undervalued.
Transocean stock price forecast
The daily chart shows that the RIG stock price bottomed at $4.47 after it published weak financial results in February. It has now rebounded and moved above the 50-day moving average. The stock has now settled at the 100-day Exponential Moving Average (EMA).
Transocean has also jumped above the important resistance point at $5.55, its lowest point on December 7th. The Relative Strength Index (RSI) and the MACD indicator have all pointed upwards.
Therefore, the outlook for the stock is moderately bullish, with the next level to watch being at $6.80, the highest swing on December 27th. This price is about 17% above the current level.
The post Transocean (RIG) stock: Technicals point to a 17% upside appeared first on Invezz
