FBR Capital Maintains an 'Outperform' on Transocean (RIG); Recent Hangover Won't Last Forever

FBR Capital maintains an 'Outperform' on Transocean (NYSE: RIG), PT lowered from $103 to $94.

FBR analyst says, "We continue to believe that Transocean Inc. is oversold, as we estimate the company’s ultimate liability will be far lower than the ~$6 billion currently priced into the stock. While our earnings expectations for the company are muted, we believe there is meaningful upside to the company's share price as investors gain increased confidence that the shares are pricing in too much liability risk, particularly given Transocean’s seemingly ironclad indemnification clauses."

"We are lowering our earnings estimates following Transocean's 1Q11 earnings miss, as the company guided to higher expenses and taxes than we were modeling. This, combined with tempered deepwater utilization expectations based on 1Q11 results, has us lowering our 2011 and 2012 EPS estimates to $4.00 and $5.85 from $5.10 and $6.45, respectively."

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

Shares of Transocean closed at $68.77 yesterday.

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