Transocean (RIG) Outperforms Broader Market: What You Need to Know

In the latest market close, Transocean (RIG) reached $6.10, with a +0.99% movement compared to the previous day. The stock's performance was ahead of the S&P 500's daily gain of 0.89%. At the same time, the Dow added 1.03%, and the tech-heavy Nasdaq gained 1.25%.

Heading into today, shares of the offshore oil and gas drilling contractor had gained 29.34% over the past month, outpacing the Oils-Energy sector's gain of 5.25% and the S&P 500's gain of 3.56% in that time.

The upcoming earnings release of Transocean will be of great interest to investors. In that report, analysts expect Transocean to post earnings of -$0.09 per share. This would mark year-over-year growth of 76.32%. In the meantime, our current consensus estimate forecasts the revenue to be $780 million, indicating a 20.18% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.09 per share and revenue of $3.68 billion. These totals would mark changes of +109.38% and +28.37%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Transocean. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 46.49% downward. Right now, Transocean possesses a Zacks Rank of #3 (Hold).

Investors should also note Transocean's current valuation metrics, including its Forward P/E ratio of 69.31. This denotes a premium relative to the industry's average Forward P/E of 15.08.

The Oil and Gas - Drilling industry is part of the Oils-Energy sector. With its current Zacks Industry Rank of 210, this industry ranks in the bottom 17% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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