Transocean (Hold, TP: USD5.00) - 2024 looking more challenging
While we are slightly above consensus on Q4 EBITDA, 2024 looks to be a challenging transition year for Transocean. This was supported by the fleet status report released after US market close yesterday, which had no major incremental backlog additions, and several rigs set for lower earnings contributions in 2024 for various reasons. Thus, we now have an even more conservative view of 2024, and are c18% below consensus on EBITDA. With high operating leverage to the deepwater market and a premium valuation, investors appear muted for now. We reiterate our HOLD but have cut our target price to USD5 (8).
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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