Seadrill Limited (SDRL)
NYSE:SDRL
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Seadrill Limited
(NYSE:SDRL)
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Rating:56Neutral
Price Target:
$46.00
▲(2.29% Upside)
Action:ReiteratedDate:03/19/26
The score is held back primarily by weakened 2025 profitability and cash flow despite a currently improved balance sheet. Offsetting this, technicals are solid and the latest earnings call pointed to stronger 2026–2027 fundamentals supported by backlog and repriced contracts, while valuation remains less supportive due to loss-making results and no dividend.
Positive Factors
Contracted Backlog / Revenue Coverage
High contracted backlog and ~90% revenue coverage for 2026 provide durable cashflow visibility across the underwriting year. This reduces near-term market exposure, supports operational planning, and underpins the firm's path to consistent free cash flow as re‑priced and reactivated contracts commence.
Negative Factors
Weak Cash Generation
Negative operating and free cash flow in 2025 indicates fragile cash conversion and reduces self‑funding capacity for capex or reactivations. Persistent cash burn would force reliance on liquidity or capital markets, increasing funding risk during cyclical troughs.
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Positive Factors
Negative Factors
Contracted Backlog / Revenue Coverage
High contracted backlog and ~90% revenue coverage for 2026 provide durable cashflow visibility across the underwriting year. This reduces near-term market exposure, supports operational planning, and underpins the firm's path to consistent free cash flow as re‑priced and reactivated contracts commence.
Read all positive factors
Seadrill Limited (SDRL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.80B
Dividend YieldN/A
Average Volume (3M)990.16K
Price to Earnings (P/E)―
Beta (1Y)1.11
Revenue Growth-9.31%
EPS Growth-91.57%
CountryUS
Employees3,300
SectorEnergy
Sector Strength52
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)-0.16
Shares Outstanding62,449,448
10 Day Avg. Volume757,229
30 Day Avg. Volume990,162
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)0.75
Price to Sales (P/S)1.50
P/FCF Ratio-15.57
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue2.16
Enterprise Value/Gross Profit13.34
Enterprise Value/Ebitda11.86
Forecast
1Y Price Target
$52.00Price Target Upside15.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)0.79
Revenue Forecast (FY)$1.43B
Seadrill Limited Business Overview & Revenue Model
Company Description
Seadrill Limited provides offshore contract drilling services to the oil and gas industry worldwide. It operates in three segments: Harsh Environment, Floaters, and Jack-ups Rigs. The company owns and operates drillships, semi-submersible rigs, an...
How the Company Makes Money
Seadrill primarily makes money by contracting its offshore drilling units to oil and gas companies under drilling service agreements. The main revenue stream is dayrate-based contract revenue, where customers pay a negotiated daily rate for the us...
Seadrill Limited Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational performance, record safety, meaningful backlog additions and clear guidance for a 2026–2027 earnings and cash flow improvement driven by repriced contracts, rig reactivations and reduced capital spend. Short-term headwinds were acknowledged: a challenging 2025 market, Q4 cash outflows including a $43 million legal payment, stacked low-spec assets with high reactivation costs, and near-term availability/contracting risk for several rigs. On balance, the positives—EBITDA outperformance, backlog growth (+$0.5B to ~$2.5B), 90% revenue coverage at midpoint for 2026, committed utilization at 88% and a visible path to stronger free cash flow in H2 2026—outweigh the near-term negatives.Positive Updates
Record Safety and Operational Excellence
Seadrill achieved its best safety performance in company history with total recordable incident rate 50% better than the IADC offshore industry benchmark. Operational milestones include West Neptune completing a record 6-zone completion in 11 days (60% faster than prior benchmark), West Tellus achieving 400 consecutive days of BOP subsea deployment (second longest in fleet history), over 100 MPD wells drilled fleetwide, West Elara winning ConocoPhillips Supplier of the Year, and Sevan Louisiana executing first U.S. Gulf deployment of Trendsetter's Trident intervention system.
Negative Updates
Q4 Cash Outflows and Legal Payment
Seadrill used $63 million of cash in Q4 primarily related to a $43 million payment for an unfavorable legal judgment tied to the Sonadrill joint venture, accelerated capital and long-term maintenance spending (noted $69 million of CapEx/LTM activity in Q4 to prepare rigs) and timing of accounts payable disbursements. Year-end cash balance was $365 million (including $26 million restricted) with total liquidity of $524 million and gross principal debt of $625 million maturing through 2030.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Safety and Operational Excellence
Seadrill achieved its best safety performance in company history with total recordable incident rate 50% better than the IADC offshore industry benchmark. Operational milestones include West Neptune completing a record 6-zone completion in 11 days (60% faster than prior benchmark), West Tellus achieving 400 consecutive days of BOP subsea deployment (second longest in fleet history), over 100 MPD wells drilled fleetwide, West Elara winning ConocoPhillips Supplier of the Year, and Sevan Louisiana executing first U.S. Gulf deployment of Trendsetter's Trident intervention system.
Read all positive updates
Company Guidance
Seadrill guided full-year 2026 total operating revenues of $1.40–$1.45 billion (excludes ~$50 million of reimbursables) and adjusted EBITDA of $350–$400 million (which includes a $26 million non‑cash amortization/mobilization expense), noting Q1 will be lower with a step‑up in Q2 as the West Jupiter, West Tellus and West Capella commence contracts; management said ~90% of the midpoint of 2026 revenue is covered by firm backlog, contracted backlog stands at ≈$2.5 billion after adding $0.5 billion (including $152 million from West Capella’s ~440‑day award and $48 million from a 4‑month West Neptune extension), full‑year CapEx and long‑term maintenance are guided to $200–$240 million, and an inflection to strong cash generation is expected mid‑2026; liquidity and balance‑sheet metrics include $365 million of cash (incl. $26 million restricted), $524 million total liquidity and $625 million gross principal debt (maturities through 2030), while market indicators cited committed drillship utilization at 88% and Westwood forecasts floater utilization of 91% in 2026 and 96% in 2027—with repricing tailwinds such as West Jupiter and West Tellus being repriced to three‑year contracts at roughly $200,000/day higher than prior rates.Seadrill Limited Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
67
Positive
Cash Flow
38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Mar 2023 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.44B | 1.39B | 1.47B | 936.00M | 907.00M |
| Gross Profit | 173.00M | 293.00M | 565.00M | 281.00M | -38.00M |
| EBITDA | 248.00M | 562.00M | 494.00M | 224.00M | -336.00M |
| Net Income | -77.00M | 446.00M | 300.00M | 3.91B | -587.00M |
Balance Sheet | |||||
| Total Assets | 3.95B | 4.16B | 4.22B | 2.80B | 3.90B |
| Cash, Cash Equivalents and Short-Term Investments | 339.00M | 478.00M | 697.00M | 480.00M | 293.00M |
| Total Debt | 613.00M | 618.00M | 610.00M | 518.00M | 908.00M |
| Total Liabilities | 1.09B | 1.24B | 1.24B | 1.10B | 7.61B |
| Stockholders Equity | 2.86B | 2.92B | 2.98B | 1.70B | -3.72B |
Cash Flow | |||||
| Free Cash Flow | -138.00M | -69.00M | 186.00M | -140.00M | -183.00M |
| Operating Cash Flow | -28.00M | 88.00M | 287.00M | 9.00M | -154.00M |
| Investing Cash Flow | -113.00M | 226.00M | 42.00M | 343.00M | 37.00M |
| Financing Cash Flow | -3.00M | -532.00M | -200.00M | -363.00M | 0.00 |
Seadrill Limited Technical Analysis
Positive
44.97
Price Trends
41.34
Positive
36.57
Positive
33.31
Positive
Market Momentum
0.90
Positive
58.45
Neutral
72.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDRL, the sentiment is Positive. The current price of 44.97 is above the 20-day moving average (MA) of 43.56, above the 50-day MA of 41.34, and above the 200-day MA of 33.31, indicating a bullish trend. The MACD of 0.90 indicates Positive momentum. The RSI at 58.45 is Neutral, neither overbought nor oversold. The STOCH value of 72.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SDRL.
Seadrill Limited Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $6.94B | 3.62 | 38.72% | ― | 6.81% | -61.94% | |
67 Neutral | $1.70B | 23.49 | 4.41% | 5.99% | 5.83% | -11.86% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $4.15B | -25.02 | -2.83% | 5.42% | -16.59% | 83.95% | |
65 Neutral | $7.47B | -1.36 | -32.62% | ― | 16.93% | -335.82% | |
58 Neutral | $3.63B | ― | -11.45% | 3.24% | 35.89% | -148.39% | |
56 Neutral | $2.80B | -54.06 | -2.68% | ― | -9.31% | -91.57% |
* Energy Sector Average
SDRL
Seadrill Limited
44.97
19.53
76.77%
HP
Helmerich & Payne
36.36
11.46
46.01%
PTEN
Patterson-UTI
10.93
2.81
34.64%
RIG
Transocean
6.77
3.55
110.25%
BORR
Borr Drilling
5.55
3.17
133.19%
VAL
Valaris
100.26
59.99
148.97%
Seadrill Limited Corporate Events
Executive/Board Changes
Seadrill Names Samir Ali as New Chief Executive
Positive
Mar 18, 2026
On March 12, 2026, Seadrill Limited’s board appointed Samir Ali as president and chief executive officer, replacing Simon Johnson with immediate effect, as part of a leadership transition at the offshore driller. Ali, 40, previously served a...
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.