Transocean (Buy, TP: USD7.00) - Upbeat on rates, but soft guidance
As in previous earnings calls, Transocean’s upbeat market commentary gained most attention: it said it has several LOIs in place at day-rates at the mid-USD200k level. We agree the UDW market is heading in the right direction, and see most upcoming contracts in the high-USD100/low-USD200k area, with some contracts heading towards the mid-USD200k level. It’s Q4 guidance and early indications for 2020 have prompted us to lower our 2019e and 2020e EBITDA by 8%. We reiterate our BUY and USD7 target price.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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