Transocean (NYSE: RIG) stock price has faced major headwinds in the past few months even as energy prices have remained at an elevated level. It has remained in a deep bear market as it collapsed by over 35% from its highest point this year. It is also much lower than its all-time high of $130, which it reached in May 2008.

Transocean, one of the biggest offshore drillers in the world, has been under pressure for a long time. For example, its annual revenue rose to over $3 billion in 2019 and $3.1 billion in 2021. It then retreated to $2.8 billion in 2023.

Most importantly, the company has struggled to make a profit even as oil prices have remained significantly high. Its net loss came in at $1.2 billion in 2019 and $954 million in 2023. Its has lost over $3.5 billion in the past five financial years, which explains why its stock is underperforming.

Transocean will be in the spotlight on Monday when it publishes its first-quarter results. Analysts expect its results to show that its total revenue for the quarter came in at $787 million, up from $649 million in the same period in 2023. 

Analysts also expect that the company’s guidance will point to $888 million in the second quarter. For the year, the expectation is that its revenue will be $3.62 billion followed by over $4.02 billion in 2026.

Transocean is also expected to remain in the loss-making category for a while. It will deliver a 14 cents per share loss for the first quarter followed by 3 cents in Q2. Still, traders will react to its actions to narrow its losses.

The stock will also react to its actions to boost its balance sheet. In the most recent quarter, the company decided to extend its revolving credit facility to mid-2025. It also plans to use its free cash flow to de-lever its balance sheet.

Transocean has made several important announcements recently. It secured a big $195 million drilling contract in April. Also, the company added contract extensions worth over $248 million this month. 

RIG chart by TradingView

In my last forecast on Transocean, I accurately predicted that its stock would jump to $6.80, which it did earlier this month.

Turning to the weekly chart, we see that the RIG stock price has been in a slow uptrend in the past few months. A closer look shows that the stock is consolidating at the 50-week and 100-week Exponential Moving Averages (EMA).

The most important catalyst for the stock is that it has formed a rising broadening wedge pattern. This pattern started its formation in 2020 as the Covid-19 pandemic started. In most cases, this pattern is one of the most bearish signs.

Therefore, there is a likelihood that the stock will have a bearish breakout in the coming weeks. This breakout could happen when the company publish its financial results on Monday. If this happens, the next point to watch will be at $2.40, its lowest point in September 2022.

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