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Borr Drilling Limited (BORR)
NYSE:BORR
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Borr Drilling
(NYSE:BORR)
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Rating:67Neutral
Price Target:
$6.50
▲(7.79% Upside)
Action:ReiteratedDate:02/20/26
The score is driven by strong technical momentum and a generally constructive earnings-call outlook (high utilization, liquidity, and improving contract coverage). This is tempered by a higher-risk financial profile—especially leverage and revenue/free-cash-flow volatility—and a less compelling valuation due to the elevated P/E despite the solid dividend yield.
Positive Factors
High Fleet Utilization
Near-100% technical and economic utilization demonstrates durable operational execution and high fleet productivity. Sustained utilization supports stable dayrate capture, maximizes revenue per asset, strengthens customer relationships and underpins predictable cash flow and margin sustainability over the next 2–6 months.
Strong Liquidity Buffer
A total liquidity pool of roughly $614M gives management flexibility through the cycle, enabling funding for reactivations, working capital and debt service without immediate refinancing. This materially reduces short‑term solvency risk and supports strategic actions such as accretive M&A or tender participation.
Accretive Fleet Expansion
Adding five premium jackups increases fleet quality and scale, improving access to longer-term, higher-margin contracts and expanding addressable opportunities. The accretive nature of the deal supports EBITDA capacity and strengthens Borr's market position in the premium jack-up segment into 2026–2027.
Negative Factors
Elevated Leverage
Leverage materially above equity increases refinancing and interest-rate exposure and constrains financial flexibility. In a cyclical offshore market, elevated debt magnifies downside risk to covenants and liquidity, limiting the firm's ability to absorb weaker dayrates or fund opportunistic capex without dilutive or costly financing.
Volatile Free Cash Flow
Large swings from multi-year negative free cash flow to a single-year positive result indicate lumpy working-capital and capex patterns. Persistent FCF volatility undermines predictability for debt service, reinvestment or distributions, increasing the company's exposure if contracting or dayrates weaken over the next several quarters.
H2 2026 Contracting / Reactivation Risk
Concentration of uncontracted days in H2 2026 and several idle/acquired rigs requiring significant reactivation capex create execution risk. Failure to convert tenders or costly reactivations would extend cash burn, depress utilization and delay margin recovery, pressuring liquidity and earnings into late 2026/2027.
Borr Drilling (BORR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.87B
Dividend Yield5.99%
Average Volume (3M)6.48M
Price to Earnings (P/E)35.5
Beta (1Y)1.43
Revenue Growth5.83%
EPS Growth-11.86%
CountryUS
Employees2,087
SectorEnergy
Sector Strength52
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)0.00
Shares Outstanding306,872,800
10 Day Avg. Volume7,471,710
30 Day Avg. Volume6,484,452
Financial Highlights & Ratios
PEG Ratio-0.48
Price to Book (P/B)0.86
Price to Sales (P/S)1.04
P/FCF Ratio8.30
Enterprise Value/Market Cap1.76
Enterprise Value/Revenue3.22
Enterprise Value/Gross Profit5.44
Enterprise Value/Ebitda7.17
Forecast
1Y Price Target
$5.93Price Target Upside-1.66% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)-0.03
Revenue Forecast (FY)$1.08B
Borr Drilling Business Overview & Revenue Model
Company DescriptionBorr Drilling Limited operates as an offshore drilling contractor to the oil and gas industry worldwide. It owns, contracts, and operates jack-up rigs for operations in shallow-water areas, including the provision of related equipment and work crews to conduct oil and gas drilling and workover operations for exploration and production. The company serves oil and gas exploration and production companies, such as integrated oil companies, state-owned national oil companies, and independent oil and gas companies. As of December 31, 2021, it operated a fleet of 23 jack-up drilling rigs. The company was formerly known as Magni Drilling Limited and changed its name to Borr Drilling Limited in December 2016. Borr Drilling Limited was incorporated in 2016 and is based in Hamilton, Bermuda.
How the Company Makes MoneyBorr Drilling generates revenue primarily through the leasing of its drilling rigs to oil and gas companies on a contractual basis. The company typically enters into contracts that can range from short-term to multi-year agreements, providing steady cash flow. Key revenue streams include day rates charged for rig operations, mobilization fees, and additional services related to drilling operations. Borr Drilling's financial performance is heavily influenced by demand for offshore drilling services, oil prices, and the global economic environment. The company also benefits from strategic partnerships with major oil companies, which can lead to long-term contracts and increased utilization of its rig fleet.
Borr Drilling Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive operational and financial position: very high utilization, strong liquidity, successful capital markets activity, accretive acquisition of five premium rigs, and tangible contracting momentum (seven commitments and ~$145M backlog additions). These positives were balanced against short-term headwinds — a Q4 revenue decline (-6.4% QoQ), higher operating costs (+7.4% QoQ), a small Q4 net loss, outstanding Pemex receivables (~$90–100M), and material uncontracted exposure in H2 2026 (48% coverage) including several idle rigs that may require reactivation capital. Management’s outlook is optimistic, expecting tender awards by mid-2026 and a dayrate recovery into 2027, and actions taken in 2025 strengthened liquidity and strategic flexibility.Q4-2025 Updates
Positive Updates
Strong Operational Utilization
Technical utilization of 98.8% and economic utilization of 97.8% in Q4, indicating high fleet productivity and effective operations.
Robust Adjusted EBITDA Performance
Q4 adjusted EBITDA of approximately $105.4M and full-year adjusted EBITDA of $470.1M, which was at the top end of guidance despite headwinds.
Solid Liquidity Position
Cash and cash equivalents of $379.7M as of Dec 31 and $234.0M undrawn revolving credit facilities, yielding total liquidity of $613.7M—cash increased by $151.9M QoQ.
Accretive Fleet Expansion
Completed acquisition of five premium jackups from Noble (integration ahead of expectations); January cash consideration of $174.0M plus $150.0M letter of credit for remaining consideration—adds scale and near-term opportunity capacity.
Contracting Momentum and Backlog Additions
Secured seven new commitments since last report, including five year-to-date 2026 commitments adding ~ $145.0M to backlog; notable extensions in Mexico, US, West Africa, Asia and Vietnam.
Improving 2026 Coverage and Market Visibility
2026 fleet coverage stands at 64% overall, 80% for H1 (including acquired rigs); management expects coverage to exceed 70% as negotiations progress and anticipates modestly higher contracting days in 2026 vs 2025.
Favorable Industry Tender Pipeline
Citing Petrodata, management highlighted ~120 rig-years in tender/pre-tender phase for opportunities starting within 12 months and expects awards by mid-2026—supporting a potential utilization and rate recovery into 2027.
Capital Markets Execution
Completed $165M bond issuance (due 2030) and equity offering raising gross $84M in December with strong investor demand; progressed listing on Euronext Growth and planning full uplisting to Oslo in 2026.
Safety and Operational Recognition
Multiple rigs achieved notable LTI-free milestones (Idun 6 years, Grid 3 years, Gunnlod and Gerd 1 year) and Arabia 3 received Aramco offshore award for best safety score in 2025.
Negative Updates
Quarterly Revenue Decline
Q4 operating revenues were $259.4M, down $17.7M or 6.4% vs Q3, primarily driven by a $16.0M decrease in dayrate revenue as rigs transitioned into lower-dayrate contracts.
Rising Operating Costs
Total operating expenses in Q4 were $192.1M, an increase of $13.2M or 7.4% QoQ, mainly due to $11.6M higher rig operating and maintenance expenses from personnel cost increases, accelerated amortization (Hild) and reimbursables.
Q4 Net Loss and YoY EBITDA Decline
Recorded a small net loss of $1.0M in Q4; full-year adjusted EBITDA of $470.1M represented a 7% decrease vs 2024.
Concentration of Uncontracted Days in H2 2026
While H1 2026 coverage is strong (80%), second-half coverage stood at 48%, creating execution and utilization risk if tender awards/contracting do not materialize as expected.
Receivables and Payment Risk in Mexico
Estimated outstanding receivables from Mexico (Pemex) of ~$90–100M at quarter end (received ~$46M in Q4 and a further $23M in January), indicating continued but improving collection risk.
Idle/Stacked Rigs and Reactivation Costs
Several acquired/idle rigs (Sif, Freya, Var) remain without firm work; Var estimated to require significant reactivation CapEx (~$56M), and timelines for Freya may extend into late 2026/early 2027.
Cash Outflow for Acquisition and High Interest Costs
Post-quarter cash outflow included $174.0M cash payment for the five-rig acquisition; Q4 interest payments totaled $94.7M and $70.8M of debt was repaid in the quarter—interest burden remains notable.
Dayrate Pressure and Regional Rate Dispersion
Dayrates have been largely sideways with regional dispersion (Asia softer, Middle East competitive); Q4 movement to lower-dayrate contracts contributed to revenue decline and leaves sensitivity to rate recovery timing.
Company Guidance
Management reiterated that full‑year 2025 adjusted EBITDA finished at $470.1m (top of guidance) with Q4 operational revenues of $259.4m, technical utilization 98.8% and economic utilization 97.8%, Q4 adjusted EBITDA ~ $105m and a Q4 net loss of $1m; looking to 2026 they stopped short of formal EBITDA guidance but said fleet coverage stands at 64% for 2026 (80% in H1 and 48% in H2, noting H1 would have been ~85% before the five‑rig acquisition), they have secured seven new commitments since the last report (five YTD adding ~ $145m to backlog), expect contracting days in 2026 to modestly exceed 2025 and to lift coverage above 70% in coming months, and see awards from a ~120 rig‑year Petrodata tender pipeline by mid‑2026 with dayrate recovery expected into 2027; they also highlighted balance‑sheet strength to support this (cash $379.7m, undrawn RCF $234.0m, total liquidity $613.7m), the accretive five‑rig purchase (paid $174m cash + $150m L/C), and recent capital market activity (issued $165m bonds, raised ~$84m equity).Borr Drilling Financial Statement Overview
Summary
Turnaround to sustained profitability and positive operating cash flow, with 2025 positive free cash flow. Offsetting this are sharp revenue volatility (notably a steep 2025 decline), highly uneven historical free cash flow, and elevated leverage (debt materially exceeding equity), which increases downturn/refinancing risk.Income Statement
Profitability has improved materially versus 2020–2022 losses, with positive EBIT and net income in 2023–2025. Margins in 2023–2024 were strong (2024 net margin ~8% and solid operating profitability), but 2025 net income fell versus 2024 and revenue declined sharply in 2025 (about -36% year-over-year), highlighting cyclicality and less consistent earnings momentum.66
Positive
Balance Sheet
The balance sheet is asset-backed and equity has grown since 2021–2022, but leverage remains elevated: debt is ~2.15B against ~1.22B equity in 2025 (and debt-to-equity was ~1.73–2.15 in 2021–2024). Returns on equity improved into positive territory in 2023–2024, yet the capital structure still leaves the company more exposed to downturns and refinancing risk than a typical industrial peer.48
Neutral
Cash Flow
Cash generation is improving but remains uneven. Operating cash flow turned positive in 2024–2025 and stepped up meaningfully in 2025 (~252M), supporting positive free cash flow in 2025 (~127M). However, the prior two years included large free-cash-flow deficits (notably 2024 at about -332M and 2023 at about -165M), and free cash flow growth is highly volatile, suggesting working-capital swings and/or lumpy capital spending.52
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.02B | 1.01B | 771.60M | 443.80M | 245.30M |
| Gross Profit | 372.20M | 879.40M | 654.20M | 327.30M | 125.70M |
| EBITDA | 469.80M | 473.00M | 331.90M | -32.50M | 29.20M |
| Net Income | 45.00M | 82.10M | 22.10M | -292.80M | -193.00M |
Balance Sheet | |||||
| Total Assets | 3.63B | 3.42B | 3.08B | 3.00B | 3.08B |
| Cash, Cash Equivalents and Short-Term Investments | 380.70M | 61.60M | 102.50M | 108.00M | 34.90M |
| Total Debt | 2.15B | 2.11B | 1.70B | 1.60B | 1.92B |
| Total Liabilities | 2.40B | 2.43B | 2.10B | 2.10B | 2.19B |
| Stockholders Equity | 1.22B | 993.30M | 984.00M | 897.80M | 889.90M |
Cash Flow | |||||
| Free Cash Flow | 127.40M | -332.10M | -164.70M | -20.80M | -77.80M |
| Operating Cash Flow | 251.90M | 77.30M | -50.70M | 62.50M | -58.90M |
| Investing Cash Flow | -124.50M | -409.40M | -104.20M | -82.60M | 40.90M |
| Financing Cash Flow | 190.80M | 292.00M | 139.00M | 92.60M | 44.80M |
Borr Drilling Technical Analysis
Positive
6.03
Price Trends
4.61
Positive
3.87
Positive
3.07
Positive
Market Momentum
0.42
Negative
69.49
Neutral
83.89
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BORR, the sentiment is Positive. The current price of 6.03 is above the 20-day moving average (MA) of 5.32, above the 50-day MA of 4.61, and above the 200-day MA of 3.07, indicating a bullish trend. The MACD of 0.42 indicates Negative momentum. The RSI at 69.49 is Neutral, neither overbought nor oversold. The STOCH value of 83.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BORR.
Borr Drilling Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.87B | 35.45 | 4.33% | 5.99% | 5.83% | -11.86% | |
67 Neutral | $1.55B | 46.09 | 1.99% | ― | -1.95% | 530.91% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $3.16B | -34.18 | -2.80% | 5.42% | -16.59% | 83.95% | |
65 Neutral | $7.21B | -2.05 | -31.70% | ― | 16.93% | -335.82% | |
64 Neutral | $1.14B | 4.73 | 68.44% | ― | 6.52% | ― | |
54 Neutral | $2.81B | 90.55 | 1.18% | ― | -9.31% | -91.57% |
* Energy Sector Average
BORR
Borr Drilling
6.03
3.38
127.55%
HLX
Helix Energy
9.60
1.17
13.88%
NBR
Nabors Industries
77.95
37.68
93.57%
PTEN
Patterson-UTI
8.34
0.84
11.20%
RIG
Transocean
6.41
3.32
107.44%
SDRL
Seadrill Limited
45.22
17.68
64.20%
Borr Drilling Corporate Events
Borr Drilling Completes $84 Million Equity Offering for Rig Acquisition
Dec 10, 2025
On December 10, 2025, Borr Drilling Limited announced the settlement of its public offering of 21 million common shares at $4.00 each, raising $84 million. The proceeds, along with funds from a debt offering and seller financing, will be used to acquire five premium jack-up rigs and for general corporate purposes, potentially impacting the company’s operational capacity and market positioning.
The most recent analyst rating on (BORR) stock is a Hold with a $3.50 price target. To see the full list of analyst forecasts on Borr Drilling stock, see the BORR Stock Forecast page.
Borr Drilling Prices $84 Million Equity Offering and Prepares for Oslo Listing
Dec 9, 2025
On December 9, 2025, Borr Drilling Limited announced the pricing of its public offering of 21 million common shares at $4.00 per share, raising $84 million. The proceeds are intended for acquiring five premium jack-up rigs and general corporate purposes. The company is also in the process of listing its shares on the Euronext Growth Oslo, with trading expected to begin on December 19, 2025, as part of its strategy to re-list on the Oslo Stock Exchange. This move is anticipated to enhance Borr Drilling’s market presence and provide greater flexibility for stakeholders.
The most recent analyst rating on (BORR) stock is a Hold with a $3.50 price target. To see the full list of analyst forecasts on Borr Drilling stock, see the BORR Stock Forecast page.
Borr Drilling Prices $165 Million Senior Secured Notes for Rig Acquisition
Dec 9, 2025
On December 9, 2025, Borr Drilling Limited announced the pricing of an additional offering of 10.375% senior secured notes due 2030, amounting to approximately $165 million. The proceeds from this offering, along with funds from a previous equity offering and seller financing, are intended for the acquisition of five premium jack-up rigs and general corporate purposes, including debt service and potential mergers and acquisitions. This strategic move is expected to enhance Borr Drilling’s operational capabilities and market position in the offshore drilling sector.
The most recent analyst rating on (BORR) stock is a Hold with a $3.50 price target. To see the full list of analyst forecasts on Borr Drilling stock, see the BORR Stock Forecast page.
Borr Drilling Launches $85 Million Equity Offering and Plans Oslo Listing
Dec 9, 2025
On December 8, 2025, Borr Drilling Limited announced a public offering of 21 million common shares to raise approximately $85 million. The funds will be used for acquiring five premium jack-up rigs and general corporate purposes, including debt service and potential mergers. The company is also planning to list its shares on the Euronext Growth Oslo, with trading expected to commence on December 19, 2025, marking a step towards re-listing on the Oslo Stock Exchange. This move is anticipated to strengthen Borr Drilling’s market position and provide additional liquidity for stakeholders.
The most recent analyst rating on (BORR) stock is a Hold with a $3.50 price target. To see the full list of analyst forecasts on Borr Drilling stock, see the BORR Stock Forecast page.
Borr Drilling to Acquire Five Premium Rigs from Noble Corporation
Dec 9, 2025
On December 8, 2025, Borr Drilling Limited announced an agreement to acquire five premium jack-up rigs from Noble Corporation for $360 million. This acquisition, expected to close in Q1 2026, will expand Borr Drilling’s fleet from 24 to 29 rigs, enhancing its position as a leading owner of young premium jack-up rigs. The acquisition is strategically timed with rising demand in the jack-up rig market and is anticipated to be immediately accretive to the company’s Adjusted EBITDA. Additionally, Borr Drilling has initiated steps to list its shares on the Euronext Growth Oslo as part of a strategy to re-list on the Oslo Stock Exchange, driven by strong investor interest.
The most recent analyst rating on (BORR) stock is a Hold with a $3.50 price target. To see the full list of analyst forecasts on Borr Drilling stock, see the BORR Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.