Transocean (Sell, TP: USD0.50) - Dinosaur risk
Having an industry-leading backlog and liquidity runway has gone from being an advantage to potentially resulting in Transocean being left with a ‘dinosaur capital structure’ if most of its competitors restructure. Hence, the coming industry restructuring may impact Transocean’s capital structure as well, with a risk of the current equity being marginalised. Given our negative NAV calculation and 2020e net debt/EBITDA of 8x, we have cut our target price to USD0.5 (2.5) and our recommendation to SELL (HOLD).
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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