Analyst Downgrades: Transocean LTD, Seadrill Ltd, and Suncor Energy Inc. (USA)

Analysts downwardly revised their ratings on RIG, SDRL, and SU

by Alex Eppstein

Published on Dec 1, 2014 at 9:26 AM
Updated on Jun 24, 2020 at 10:16 AM

Analysts are weighing in today on energy names Transocean LTD (NYSE:RIG), Seadrill Ltd (NYSE:SDRL), and Suncor Energy Inc. (USA) (NYSE:SU). Here's a quick roundup of today's bearish brokerage notes on RIG, SDRL, and SU.

  • RIG saw its price target slashed to $18 from $25 at Susquehanna -- to go along with an underscored "neutral" opinion -- and its rating reduced to "neutral" from "buy" at Guggenheim. This negativity follows a woeful performance by the shares, which are down 57.5% year-to-date to rest at $21.01, and hit another fresh 10-year low of $20.88 on Friday . In fact, all 16 analysts covering Transocean LTD have given it a "hold" or "strong sell" recommendation. Plus, more than one-quarter of the equity's float is sold short, representing 6.5 days' worth of pent-up buying demand, at RIG's average daily volume.

  • Sector peer SDRL, meanwhile, received a trio of brokerage notes. On the one hand, Canaccord Genuity reduced its price target on the stock to NOK 90 from NOK 125 (and reiterated its "sell" recommendation), while Guggenheim cut its rating to "neutral" from "buy." On the other, Wells Fargo lifted its opinion on Seadrill Ltd to "market perform." Technically speaking, the security has struggled, tumbling 64.3% in 2014 to trade at $14.66, and underperforming the broader S&P 500 Index (SPX) by 59 percentage points during the last three months. Also, the stock bottomed at a five-year low of $14.26 on Friday. On the sentiment front, short interest spiked 16.4% during the latest reporting period, and now makes up 8.4% of SDRL's total float.

  • Finally, National Bank Financial weighed in on a number of energy firms, including SU, where the brokerage firm trimmed its price target to C$45 from C$46, but maintained an "outperform" rating. On the charts, the security is down nearly 10% year-to-date, after gapping 10% lower on Friday to close at $31.31 amid plunging oil prices. If this downward trajectory continues, Suncor Energy Inc. could face additional bearish brokerage notes. At present, nine out of 11 covering analysts give the stock a "buy" or better recommendation, compared to two "holds" and not a single "sell." Plus, SU's consensus 12-month price target of $48 stands at a more than 53% premium to current trading levels.

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