Global Hunter Securities Upgrades Transocean (RIG) to Neutral; Valuation Call, Minimal Downside Exists

Global Hunter Securities upgraded Transocean (NYSE: RIG) from Reduce to Neutral.

Global analyst says, "We are upgrading RIG to Neutral, as its current share price is in line with our fair value estimate of $72 per share based on 12x our 2012 EPS estimate, a 7% premium to book value, and a 4% premium to our fleet-value-per-share estimate of $69. We believe the market has adopted our view that its earnings power will not come close to prior levels, given its stacking of assets and lower rates and utilization assumptions for the majority of its fleet, hence the material underperformance both QTD and YTD. We believe this has been reflected in its share price, along with a Q1 miss and consensus estimate revisions downward for 2011 and 2012."

For more ratings news on Transocean click here and for the rating history of Transocean click here.

Shares of Transocean closed at $69.12 yesterday.

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