BWS Financial Maintains Buy on Seadrill, Maintains $80 Price Target
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 16 2024
0mins
Should l Buy SDRL?
Source: Benzinga
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Analyst Views on SDRL
Wall Street analysts forecast SDRL stock price to rise
5 Analyst Rating
3 Buy
2 Hold
0 Sell
Moderate Buy
Current: 41.130
Low
32.00
Averages
44.20
High
80.00
Current: 41.130
Low
32.00
Averages
44.20
High
80.00
About SDRL
Seadrill Limited is an offshore drilling contractor. The Company is engaged in providing worldwide offshore drilling services to the oil and gas industry. Its primary business is the ownership and operation of drill ships, semi-submersible rigs, and jack-up rigs for operations in shallow to ultra-deepwater in both benign and harsh environments. Its fleet portfolio includes West Phoenix, West Aquarius, West Eclipse, Sevan Louisiana, West Capella, West Gemini, West Tellus, West Neptune, West Jupiter, West Saturn, West Carina, West Polaris, West Auriga, West Vela, West Castor, West Tucana, West Telesto, and West Elara. Its drill ships are self-propelled ships equipped for drilling offshore in water depths ranging from approximately 1,000 to 12,000 feet and are positioned over the well through a computer-controlled thruster system. Its customers include oil super-majors, state-owned national oil companies, and independent oil and gas companies. It also provides management services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Transocean's Valaris Acquisition Boosts Stock Performance
- Acquisition Boosts Stock: Transocean's stock rose 0.50% to $6.03 on Thursday, driven by its $5.8 billion acquisition of Valaris and new contract awards, which significantly enhance the company's backlog and long-term earnings potential.
- Surge in Trading Volume: The company saw a trading volume of 102.9 million shares, approximately 159% above the three-month average of 39.8 million shares, indicating strong market interest in its acquisition and contract developments.
- Market Consolidation Impact: This acquisition will create one of the world's largest deepwater drilling fleets for Transocean, likely enhancing pricing power and revenue visibility in an increasingly tightening offshore market.
- Divergent Analyst Views: While BTIG raised its price target reflecting scale benefits and contract momentum, Fearnley Fonds downgraded the stock due to valuation and balance sheet risks, prompting investors to monitor whether the merger can effectively convert increased scale and backlog into sustained cash flow.
See More
Transocean's Valaris Acquisition Boosts Stock Performance
- Acquisition Boost: Transocean's $5.8 billion acquisition of Valaris led to a 0.50% increase in stock price to $6.03, reflecting positive investor sentiment regarding future earnings potential stemming from this strategic move.
- Surge in Trading Volume: The company's trading volume reached 102.9 million shares, which is 159% above its three-month average, indicating heightened market interest in its acquisition and new contracts, potentially impacting future liquidity and investor confidence.
- Increased Backlog: The signing of new contracts increased Transocean's backlog by approximately $184 million, enhancing the company's pricing power and revenue visibility in a tightening offshore market, which may support future cash flow.
- Divergent Analyst Views: While BTIG raised its price target citing scale benefits and contract momentum, Fearnley Fonds downgraded the stock due to valuation and balance-sheet risks, highlighting market concerns about post-merger integration and sustainable cash flow generation.
See More
Seadrill Extends Contract with Equinor for $114 Million
- Contract Extension: Seadrill announced that Equinor Brasil Energia Ltda has exercised a one-year priced option, adding $114 million to its contract backlog and extending the agreement through October 2027, highlighting the long-term collaboration between the two companies in Brazil.
- Business Impact: This contract extension not only enhances Seadrill's backlog but also signifies its stability and competitiveness in the deepwater drilling market, particularly in the strategically important Brazilian basin.
- Management Commentary: Seadrill's CEO Simon Johnson noted that the continuation of the contract reinforces their commitment to collaboration with Equinor, emphasizing their shared goals in delivering safe and reliable offshore operations.
- Market Outlook: With the contract extension, Seadrill is poised to benefit from a stable revenue stream over the coming years, which will help maintain its competitive edge in the evolving offshore drilling market.
See More
Seadrill Extends Contract with Equinor for West Saturn Drillship
- Contract Renewal: Seadrill announced the renewal of its contract with Equinor Brasil Energia Ltda for the West Saturn ultra-deepwater drillship, adding $114 million to its contract backlog and extending the agreement through October 2027, highlighting a long-term partnership in Brazil.
- Business Growth: This renewal not only continues the collaboration that began in 2022 but also indicates a strong business foundation for Seadrill in the Brazilian market, which is expected to further enhance the company's revenue and market share.
- Commitment to Safety: Seadrill's CEO Simon Johnson emphasized the shared commitment to safe and reliable offshore operations, reflecting the company's operational capabilities and market position in strategically important basins.
- Industry Outlook: With the increasing global demand for deepwater drilling, Seadrill's modern fleet and advanced technologies will enable it to maintain a competitive edge in the industry, further solidifying its critical role in oil and gas resource development.
See More
Seadrill (SDRL) Shares Surge 8.9% on $235M New Contracts Announcement
- Contract Signing Boost: Seadrill announced multiple offshore drilling contracts totaling approximately $235 million, significantly enhancing its revenue backlog and earnings visibility into 2026-2027, which is expected to positively impact future performance.
- Strong Stock Performance: In the latest trading session, Seadrill shares surged 8.9% to close at $38.16, with trading volume far exceeding normal levels, reflecting strong investor confidence in the company's outlook.
- Key Contract Details: Notable contracts include a $157 million ultra-deepwater drillship contract set to commence in Q2 2026 for 440 days, along with a $78 million accommodation contract, further strengthening the company's competitive position in the Norwegian market.
- Earnings Outlook Analysis: Although the upcoming quarterly EPS is projected at $0.07, representing a 93.5% year-over-year decline, revenues are expected to reach $332 million, up 14.9% from the previous year, indicating resilience and potential growth capacity amid challenges.
See More
Seadrill Limited Secures New Rig Contracts Worth $235 Million Across Three Continents
- Contract Expansion: Seadrill's ultra-deepwater drillship West Capella secured a contract in Malaysia expected to commence in Q2 2026, with a total contract value of approximately $157 million, including a $5 million mobilization fee, ensuring stable revenue for the company over the next two years.
- New Agreement in Norway: West Elara signed an accommodation contract with Equinor on the Norwegian Continental Shelf valued at $78 million, expected to start in Q3 2026 and run into Q4 2027, and through a mutual agreement with the previous contract holder, the total contract value increased by $23 million, enhancing the company's revenue outlook.
- Brazil Contract Extension: Seadrill extended the contract for West Carina in Brazil through April 2026, ensuring continued operations in this key offshore market, reflecting the company's stability and customer trust in important markets.
- Market Reaction: Seadrill shares rose 0.63% to $35.25 in premarket trading on Wednesday, indicating a positive market response to the new contracts, further strengthening its earnings outlook.
See More
Transocean's Valaris Acquisition Boosts Stock Performance
- Acquisition Boosts Stock: Transocean's stock rose 0.50% to $6.03 on Thursday, driven by its $5.8 billion acquisition of Valaris and new contract awards, which significantly enhance the company's backlog and long-term earnings potential.
- Surge in Trading Volume: The company saw a trading volume of 102.9 million shares, approximately 159% above the three-month average of 39.8 million shares, indicating strong market interest in its acquisition and contract developments.
- Market Consolidation Impact: This acquisition will create one of the world's largest deepwater drilling fleets for Transocean, likely enhancing pricing power and revenue visibility in an increasingly tightening offshore market.
- Divergent Analyst Views: While BTIG raised its price target reflecting scale benefits and contract momentum, Fearnley Fonds downgraded the stock due to valuation and balance sheet risks, prompting investors to monitor whether the merger can effectively convert increased scale and backlog into sustained cash flow.
See More
Transocean's Valaris Acquisition Boosts Stock Performance
- Acquisition Boost: Transocean's $5.8 billion acquisition of Valaris led to a 0.50% increase in stock price to $6.03, reflecting positive investor sentiment regarding future earnings potential stemming from this strategic move.
- Surge in Trading Volume: The company's trading volume reached 102.9 million shares, which is 159% above its three-month average, indicating heightened market interest in its acquisition and new contracts, potentially impacting future liquidity and investor confidence.
- Increased Backlog: The signing of new contracts increased Transocean's backlog by approximately $184 million, enhancing the company's pricing power and revenue visibility in a tightening offshore market, which may support future cash flow.
- Divergent Analyst Views: While BTIG raised its price target citing scale benefits and contract momentum, Fearnley Fonds downgraded the stock due to valuation and balance-sheet risks, highlighting market concerns about post-merger integration and sustainable cash flow generation.
See More
Seadrill Extends Contract with Equinor for $114 Million
- Contract Extension: Seadrill announced that Equinor Brasil Energia Ltda has exercised a one-year priced option, adding $114 million to its contract backlog and extending the agreement through October 2027, highlighting the long-term collaboration between the two companies in Brazil.
- Business Impact: This contract extension not only enhances Seadrill's backlog but also signifies its stability and competitiveness in the deepwater drilling market, particularly in the strategically important Brazilian basin.
- Management Commentary: Seadrill's CEO Simon Johnson noted that the continuation of the contract reinforces their commitment to collaboration with Equinor, emphasizing their shared goals in delivering safe and reliable offshore operations.
- Market Outlook: With the contract extension, Seadrill is poised to benefit from a stable revenue stream over the coming years, which will help maintain its competitive edge in the evolving offshore drilling market.
See More
Seadrill Extends Contract with Equinor for West Saturn Drillship
- Contract Renewal: Seadrill announced the renewal of its contract with Equinor Brasil Energia Ltda for the West Saturn ultra-deepwater drillship, adding $114 million to its contract backlog and extending the agreement through October 2027, highlighting a long-term partnership in Brazil.
- Business Growth: This renewal not only continues the collaboration that began in 2022 but also indicates a strong business foundation for Seadrill in the Brazilian market, which is expected to further enhance the company's revenue and market share.
- Commitment to Safety: Seadrill's CEO Simon Johnson emphasized the shared commitment to safe and reliable offshore operations, reflecting the company's operational capabilities and market position in strategically important basins.
- Industry Outlook: With the increasing global demand for deepwater drilling, Seadrill's modern fleet and advanced technologies will enable it to maintain a competitive edge in the industry, further solidifying its critical role in oil and gas resource development.
See More
Seadrill (SDRL) Shares Surge 8.9% on $235M New Contracts Announcement
- Contract Signing Boost: Seadrill announced multiple offshore drilling contracts totaling approximately $235 million, significantly enhancing its revenue backlog and earnings visibility into 2026-2027, which is expected to positively impact future performance.
- Strong Stock Performance: In the latest trading session, Seadrill shares surged 8.9% to close at $38.16, with trading volume far exceeding normal levels, reflecting strong investor confidence in the company's outlook.
- Key Contract Details: Notable contracts include a $157 million ultra-deepwater drillship contract set to commence in Q2 2026 for 440 days, along with a $78 million accommodation contract, further strengthening the company's competitive position in the Norwegian market.
- Earnings Outlook Analysis: Although the upcoming quarterly EPS is projected at $0.07, representing a 93.5% year-over-year decline, revenues are expected to reach $332 million, up 14.9% from the previous year, indicating resilience and potential growth capacity amid challenges.
See More
Seadrill Limited Secures New Rig Contracts Worth $235 Million Across Three Continents
- Contract Expansion: Seadrill's ultra-deepwater drillship West Capella secured a contract in Malaysia expected to commence in Q2 2026, with a total contract value of approximately $157 million, including a $5 million mobilization fee, ensuring stable revenue for the company over the next two years.
- New Agreement in Norway: West Elara signed an accommodation contract with Equinor on the Norwegian Continental Shelf valued at $78 million, expected to start in Q3 2026 and run into Q4 2027, and through a mutual agreement with the previous contract holder, the total contract value increased by $23 million, enhancing the company's revenue outlook.
- Brazil Contract Extension: Seadrill extended the contract for West Carina in Brazil through April 2026, ensuring continued operations in this key offshore market, reflecting the company's stability and customer trust in important markets.
- Market Reaction: Seadrill shares rose 0.63% to $35.25 in premarket trading on Wednesday, indicating a positive market response to the new contracts, further strengthening its earnings outlook.
See More
