Transocean’s stock drops after long-time bull downgrades, slashes price target

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Shares of Transocean Ltd. dropped 1.9% in premarket trading Wednesday, after a long-time bull downgraded the oil services company, saying the company is “not immune” as the offshore industry’s challenges are likely to persist. Analyst Charles Minervino cut his rating to neutral, after being at positive since July 2018, while slashing his price target to $1.15 from $2.50. “The offshore drilling industry is suffering from weak demand and substantial excess capacity, and while [Transocean] is among the better positioned companies, it is not immune to the downturn,” Minervino wrote in a note to clients. He noted that several offshore drillers have already filed for bankruptcy. Transocean’s stock closed below $1 as recently as Friday, and closed at a record low of 84 cents on April 27. It has plunged 84.5% year to date through Tuesday, while the VanEck Vectors Oil Services ETF has tumbled 57.4% and the S&P 500 has gained 5.3%.
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