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Seadrill Limited
(NYSE:SDRL)
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Rating:57Neutral
Price Target:
$44.00
▼(-2.07% Downside)
Action:Reiterated
Date:06/30/26
The score is held back primarily by weak cash generation (negative operating and free cash flow) and still-inconsistent profitability despite the sharp revenue rebound. Positives include a comparatively strong balance sheet with modest leverage and a constructive earnings-call backdrop with raised 2026 guidance and sizable backlog additions. Valuation is penalized by a negative P/E (reflecting lack of earnings), and technicals cannot add support due to missing indicator data.
Positive Factors
Low leverage / strong equity base
Modest leverage and a sizable equity cushion provide durable financial flexibility in a capital-intensive offshore drilling industry. This balance-sheet strength lowers refinancing risk, supports access to bank and bond markets, and enables funding for operations or selective investments during cyclical downturns.
Negative Factors
Weak cash generation
Multi-year negative operating and free cash flow in a capital-intensive business raises funding and execution risk. Persistent weak cash conversion constrains reinvestment, elevates reliance on external financing for capex/reactivations, and limits the company's ability to sustainably return capital to shareholders.
Read all positive and negative factors
Positive Factors
Negative Factors
Low leverage / strong equity base
Modest leverage and a sizable equity cushion provide durable financial flexibility in a capital-intensive offshore drilling industry. This balance-sheet strength lowers refinancing risk, supports access to bank and bond markets, and enables funding for operations or selective investments during cyclical downturns.
Read all positive factors
Seadrill Limited (SDRL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.79B
Dividend YieldN/A
Average Volume (3M)916.53K
Price to Earnings (P/E)―
Beta (1Y)0.97
Revenue Growth7.91%
EPS Growth-120.67%
CountryUS
Employees3,000
SectorEnergy
Sector Strength52
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)-1.13
Shares Outstanding62,530,506
10 Day Avg. Volume626,832
30 Day Avg. Volume916,534
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$63.00Price Target Upside40.22% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.78
Revenue Forecast (FY)$1.51B
Seadrill Limited Business Overview & Revenue Model
Company Description
Seadrill Limited, a global entity, is dedicated to delivering contract drilling services for the offshore oil and gas sector. The company utilizes a diverse fleet of sophisticated equipment, including drillships, semi-submersible rigs, and jack-up...
How the Company Makes Money
Seadrill primarily makes money by contracting its offshore drilling units to oil and gas companies under drilling contracts. Revenue is generated mainly from dayrate-based drilling services, where customers pay a contracted daily rate for the rig ...
Seadrill Limited Earnings Call Summary
Earnings Call Date:May 11, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 10, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial trajectory: Seadrill reported an EBITDA beat, added substantial backlog (~$860M), completed key projects ahead of schedule and raised full-year revenue and EBITDA guidance. Near-term cash was impacted by expected reactivation and reacceptance spending, and some fleet white space and client-funded reactivation constraints remain. Management emphasized a focused path to free cash flow generation beginning mid-2026, supported by expected lump-sum mobilizations (~$70M) and conversion of rigs to market day rates.Positive Updates
EBITDA Beat and Sequential Improvement
Reported adjusted EBITDA of $97 million in Q1 2026, a sequential increase of $9 million (approximately +10% quarter-on-quarter), driven by early contract commencements, higher economic utilization and timing of operating expenditures.
Negative Updates
Q1 Cash Use and Temporary Weak Cash Flow
Used $35 million of cash in Q1 2026 (cash down from approximately $364M to $329M, ≈-9.6% QoQ), driven by reactivation and reacceptance activities (Capella reactivation, Jupiter reacceptance) and timing of working capital; Q1 cash flow was weaker as anticipated.
Read all updates
Q1-2026 Updates
Positive
Negative
EBITDA Beat and Sequential Improvement
Reported adjusted EBITDA of $97 million in Q1 2026, a sequential increase of $9 million (approximately +10% quarter-on-quarter), driven by early contract commencements, higher economic utilization and timing of operating expenditures.
Read all positive updates
Company Guidance
Seadrill updated full‑year 2026 guidance, raising operating revenues to $1.43–$1.48 billion (excludes ~$50 million of reimbursables) and adjusted EBITDA to $370–$420 million (which includes a $26 million non‑cash net expense for amortization of mobilization costs/revenues, of which $7 million was recognized in Q1); full‑year CapEx remains $200–$240 million. The guidance reflects strong Q1 results (Q1 EBITDA $97 million; contract drilling revenues $277 million; management revenues $63 million; leasing $8 million; operating expenses $334 million), ~$860 million of backlog added since the last call, and project execution (early starts for West Jupiter and West Capella and West Carina now expected through mid‑June). Balance sheet and cash flow metrics cited: total cash $329 million, $35 million cash used in Q1 (including $13 million investing CapEx and $38 million long‑term maintenance), gross principal debt $625 million, available liquidity ~$482 million, and expected lump‑sum mobilization receipts of ~ $70 million over the next two quarters—supporting the company’s view of meaningful free‑cash‑flow generation beginning in H2 2026.Seadrill Limited Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
76
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Mar 2023 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.45B | 1.44B | 1.39B | 1.47B | 936.00M | 907.00M |
| Gross Profit | 240.00M | 173.00M | 293.00M | 565.00M | 281.00M | -38.00M |
| EBITDA | 291.00M | 248.00M | 562.00M | 494.00M | 3.92B | -336.00M |
| Net Income | -24.00M | -77.00M | 446.00M | 300.00M | 3.91B | -587.00M |
Balance Sheet | ||||||
| Total Assets | 3.99B | 3.95B | 4.16B | 4.22B | 2.80B | 3.90B |
| Cash, Cash Equivalents and Short-Term Investments | 304.00M | 339.00M | 478.00M | 697.00M | 480.00M | 293.00M |
| Total Debt | 614.00M | 613.00M | 618.00M | 610.00M | 518.00M | 908.00M |
| Total Liabilities | 1.14B | 1.09B | 1.24B | 1.24B | 1.10B | 7.61B |
| Stockholders Equity | 2.85B | 2.86B | 2.92B | 2.98B | 1.70B | -3.72B |
Cash Flow | ||||||
| Free Cash Flow | -55.00M | -138.00M | -69.00M | 186.00M | -140.00M | -183.00M |
| Operating Cash Flow | -23.00M | -28.00M | 88.00M | 287.00M | 9.00M | -154.00M |
| Investing Cash Flow | -77.00M | -113.00M | 226.00M | 42.00M | 343.00M | 37.00M |
| Financing Cash Flow | -4.00M | -3.00M | -532.00M | -200.00M | -363.00M | 0.00 |
Seadrill Limited Technical Analysis
Positive
44.93
Price Trends
42.49
Positive
45.19
Negative
40.34
Positive
Market Momentum
0.12
Positive
51.13
Neutral
35.32
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 44.93 is above the 20-day moving average (MA) of 42.93, above the 50-day MA of 42.49, and above the 200-day MA of 40.34, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 51.13 is Neutral, neither overbought nor oversold. The STOCH value of 35.32 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $3.45B | -9.15 | -14.16% | 2.83% | 29.73% | -272.28% | |
67 Neutral | $5.48B | 5.51 | 31.33% | ― | -9.95% | 233.69% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
57 Neutral | $2.79B | -39.68 | -2.45% | ― | 7.91% | -120.67% | |
56 Neutral | $3.98B | -45.43 | -2.82% | 3.53% | -6.92% | 91.45% | |
53 Neutral | $5.94B | -1.74 | -20.24% | ― | 12.90% | -274.70% | |
49 Neutral | $1.24B | 24.82 | 3.14% | ― | 5.84% | -19.93% |
* Energy Sector Average
SDRL
Seadrill Limited
42.94
14.77
52.43%
HP
Helmerich & Payne
37.07
21.67
140.68%
PTEN
Patterson-UTI
10.05
4.95
97.21%
RIG
Transocean
5.16
2.21
74.92%
BORR
Borr Drilling
3.88
1.62
71.68%
VAL
Valaris
77.21
30.21
64.28%
Seadrill Limited Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Seadrill Limited Issues New Notes and Boosts Liquidity
Positive
Jun 30, 2026
On June 30, 2026, Seadrill Finance Limited issued $700 million of 6.750% senior notes due July 15, 2034, fully and unconditionally guaranteed by Seadrill Limited and certain subsidiaries, with detailed redemption features starting in 2029 and cove...
Business Operations and StrategyStock Buyback
Seadrill Extends Share Repurchase Program to Year-End 2026
Positive
Jun 22, 2026
On June 22, 2026, Seadrill Limited announced that its board has extended the company’s existing $500 million share repurchase program from its prior June 25, 2026 end date to December 31, 2026, with about $208 million still available as of J...
Business Operations and StrategyPrivate Placements and Financing
Seadrill Expands and Extends Senior Secured Revolving Credit Facility
Positive
Jun 18, 2026
On June 16, 2026, Seadrill Limited amended its senior secured revolving credit agreement, increasing the facility’s commitments from $225 million to $300 million and extending the stated maturity from 2028 to 2031, with effectiveness expecte...
Business Operations and StrategyPrivate Placements and Financing
Seadrill Announces $600 Million Senior Notes Offering
Positive
Jun 15, 2026
On June 15, 2026, Seadrill Limited announced that its wholly owned subsidiary, Seadrill Finance Limited, plans a private offering of $600 million in senior unsecured notes due 2034 to eligible institutional investors under Rule 144A and Regulation...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Seadrill Shareholders Approve Governance Measures and Incentive Plan
Positive
Jun 5, 2026
At its annual general meeting on June 3, 2026, Seadrill Limited shareholders approved several governance and compensation measures, including setting the board size at up to nine directors and re-electing all nominated directors to serve until the...
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.