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Seadrill Limited (SDRL)
:SDRL
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Seadrill Limited (SDRL) AI Stock Analysis

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SDRL

Seadrill Limited

(NYSE:SDRL)

Rating:71Outperform
Price Target:
$30.00
▼(-2.06%Downside)
Seadrill's overall score reflects strong financial performance and attractive valuation, offset by legal challenges and mixed earnings call sentiment. Positive technical indicators contribute to the outlook, but the court judgment tempers the overall enthusiasm.
Positive Factors
Contract Backlog
Added $1bn in contract backlog.
Financial Performance
SDRL reported first quarter revenue of $335 million compared to the estimate of $281 million.
Share Repurchase Strategy
The company views share repurchases as a better use of cash than buying assets, suggesting confidence in the company's value.
Negative Factors
Industry Headwinds
Seadrill (SDRL) laid on several negative developments to the business in addition to the Company facing the same industry headwinds as its peers.
Legal Challenges
SDRL is involved in a lawsuit with SFL Hercules that resulted in being ordered to pay $48 million.
Operational Delays
SDRL disclosed a delay in West Polaris beginning planned work in Brazil and the West Tellus being offline for 50 days, which would have material impact on first quarter results.

Seadrill Limited (SDRL) vs. SPDR S&P 500 ETF (SPY)

Seadrill Limited Business Overview & Revenue Model

Company DescriptionSeadrill 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, and jack-up rigs for operations in shallow and ultra-deep-water in benign and harsh environments. It offers operation support and management services to third parties, as well as related and non-related companies. As of April 8, 2022, the company owned a fleet of 21 offshore drilling units consisting of two harsh-environment rigs, two benign-environment semi-submersible rigs, six drill-ships, and 11 jack-up rigs. It serves oil super-majors, state-owned national oil companies, and independent oil and gas companies. Seadrill Limited was incorporated in 2005 and is headquartered in London, the United Kingdom.
How the Company Makes MoneySeadrill Limited generates revenue primarily through the leasing and operation of its offshore drilling rigs to oil and gas exploration and production companies. The company enters into contracts with these companies to provide drilling services, which can be short-term or long-term depending on the project requirements. Revenue is earned based on daily rates charged for the use of its rigs, which vary depending on the rig type, location, and market conditions. Additionally, Seadrill may earn income through partnerships or joint ventures with other companies in the offshore drilling sector, as well as through ancillary services such as well maintenance and management. Key factors affecting Seadrill's earnings include global oil prices, demand for offshore drilling, and operational efficiency.

Seadrill Limited Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: 28.00%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with notable achievements in securing endorsements and maintaining a strong financial position. However, challenges such as reduced economic utilization, market uncertainty, and competitive pressures on uncontracted rigs balanced out the positive aspects. The company remains optimistic about future opportunities despite current market challenges.
Q1-2025 Updates
Positive Updates
Recognition of Outstanding Service
Two rigs in Seadrill's fleet received special endorsements: The Sonangol Quenguela was awarded 2024 Rig of the Year by TotalEnergies, and the West Vela received a 2024 Supplier Recognition Award from ConocoPhillips.
Strong Financial Position
Seadrill closed the first quarter with $430 million in cash and a backlog of $2.8 billion extending through 2028 and into 2029.
Increased Operating Revenues
Total operating revenues for Q1 were $335 million, an increase of $46 million from the prior quarter, with contract-earning revenues up $44 million due to additional operating days.
Positive Market Outlook
Active dialogue with clients for opportunities commencing in the second half of 2025 and 2026, with expectations of multiple contract awards in the coming months.
Improved Utilization in April
Despite a dip to 84% in economic utilization due to issues in Brazil, a material improvement in utilization was already seen in April.
Negative Updates
Economic Utilization Below Standard
Economic utilization for Q1 was 84%, impacted by downtime for three rigs in Brazil, particularly due to regulatory matters and teething issues.
Challenges in Market Conditions
Global macro uncertainty and OPEC's accelerated supply increases are affecting commodity prices and client investment confidence, disrupting demand.
Stacked Rig and Competitive Pressure
The West Capella is currently stacked in Malaysia with ongoing discussions for potential opportunities, facing competitive pressure from other rigs.
Uncertain Demand in Key Regions
Deferral of work in Africa, leading to reduced floater demand in 2025, although growth is expected to rebound in 2027 and beyond.
Petrobras Contract Mediation
Seadrill received delay penalty notices from Petrobras related to the Sete matter, with ongoing voluntary mediation and uncertain outcomes.
Company Guidance
In the Seadrill Q1 2025 earnings call, the company provided guidance indicating total operating revenues for the full year are expected to range between $1.3 billion and $1.36 billion, excluding reimbursable revenues of $35 million. Adjusted EBITDA is projected to be between $320 million and $380 million, while full-year capital expenditures are anticipated to be between $250 million and $300 million. The company reported first-quarter EBITDA of $73 million and economic utilization of 84%. Seadrill ended the first quarter with cash on hand of $430 million and a durable contract backlog of $2.8 billion extending into 2028 and 2029. The company remains confident in the demand for deepwater drilling and expects to see multiple contract awards in the coming months, despite the current global macro uncertainty and volatility in commodity prices.

Seadrill Limited Financial Statement Overview

Summary
Seadrill Limited exhibits strong profitability and a stable financial position with a significant recovery in margins and a solid equity position. However, challenges like declining revenue and inconsistent cash flow conversion need attention.
Income Statement
75
Positive
Seadrill Limited has shown impressive recovery and growth in recent years. The gross profit margin improved significantly from a negative margin in earlier years to a healthy 100% in 2024, indicating strong profitability in its operations. The net profit margin for 2024 was 32.2%, demonstrating substantial net income relative to revenue, primarily due to reduced debt and operational improvements. However, revenue decreased slightly by 5.8% from 2023 to 2024, suggesting potential challenges in maintaining top-line growth.
Balance Sheet
65
Positive
The debt-to-equity ratio is relatively low at 0.21 in 2024, reflecting a stable capital structure with manageable debt levels. The equity ratio of 70.2% also indicates strong shareholder equity relative to total assets. Return on equity for 2024 was 15.3%, showcasing efficient use of equity to generate profits. However, the company has experienced fluctuations in its equity and total assets over the years, which may pose risks if not managed properly.
Cash Flow
70
Positive
Seadrill's free cash flow for 2024 remained stable compared to 2023, with a free cash flow to net income ratio of 0.20, indicating the company is generating adequate cash relative to its net income. The operating cash flow to net income ratio decreased, reflecting a potential area for improvement in converting net income into cash. Positive free cash flow and reduced capital expenditures suggest prudent financial management, although the decline from previous years suggests a need for careful cash flow planning.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.39B1.47B977.00M840.00M894.00M
Gross Profit293.00M565.00M277.00M54.00M-37.00M
EBITDA562.00M494.00M224.00M-336.00M-3.69B
Net Income446.00M300.00M3.67B-572.00M-4.43B
Balance Sheet
Total Assets4.16B4.22B2.80B2.90B3.96B
Cash, Cash Equivalents and Short-Term Investments478.00M697.00M480.00M375.00M485.00M
Total Debt618.00M610.00M518.00M908.00M6.09B
Total Liabilities1.24B1.24B1.10B1.34B7.10B
Stockholders Equity2.92B2.98B1.70B1.56B-3.14B
Cash Flow
Free Cash Flow-69.00M186.00M-137.32M-183.00M-447.00M
Operating Cash Flow88.00M287.00M8.83M-154.00M-420.00M
Investing Cash Flow226.00M42.00M336.42M37.00M-32.00M
Financing Cash Flow-532.00M-200.00M-356.04M0.00-163.00M

Seadrill Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price30.63
Price Trends
50DMA
26.86
Positive
100DMA
24.77
Positive
200DMA
30.91
Negative
Market Momentum
MACD
0.79
Positive
RSI
61.30
Neutral
STOCH
65.66
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 30.63 is above the 20-day moving average (MA) of 28.82, above the 50-day MA of 26.86, and below the 200-day MA of 30.91, indicating a neutral trend. The MACD of 0.79 indicates Positive momentum. The RSI at 61.30 is Neutral, neither overbought nor oversold. The STOCH value of 65.66 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

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
$1.88B5.6912.75%-15.60%32.51%
67
Neutral
$15.28B9.736.25%5.18%4.49%-71.88%
64
Neutral
$1.70B7.787.57%6.96%12.23%-37.06%
63
Neutral
$2.73B-6.65%24.47%-55.45%
63
Neutral
$577.71M10.795.17%10.76%19.15%15.37%
59
Neutral
$1.05B21.523.27%-8.19%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SDRL
Seadrill Limited
30.38
-24.96
-45.10%
HLX
Helix Energy
5.99
-6.55
-52.23%
HP
Helmerich & Payne
16.82
-22.54
-57.27%
RIG
Transocean
3.08
-2.74
-47.08%
BORR
Borr Drilling
2.23
-4.32
-65.95%

Seadrill Limited Corporate Events

Legal Proceedings
Seadrill Limited Faces $53 Million Court Judgment
Negative
Jul 18, 2025

In a recent legal development, Seadrill Limited was ordered by the High Court of Justice in England and Wales to pay damages to a claimant for a breach of contract related to negotiations in 2018 and 2019. The judgment, rendered on July 11, 2025, could result in a liability of up to $53 million for Seadrill, excluding potential legal fees. The company is considering its options, including a possible appeal, and anticipates a $10 million impact on its Adjusted EBITDA for the year 2025.

The most recent analyst rating on (SDRL) stock is a Buy with a $46.00 price target. To see the full list of analyst forecasts on Seadrill Limited stock, see the SDRL Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Seadrill Limited Approves Key Proposals at AGM
Neutral
May 19, 2025

At the Annual General Meeting of Shareholders held on May 14, 2025, Seadrill Limited addressed several key proposals. The meeting resulted in the approval of setting the number of directors at up to nine, the re-election of several directors, the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm, and the approval of director remuneration and executive compensation policies. Additionally, it was decided that advisory votes on executive compensation will be held annually.

The most recent analyst rating on (SDRL) stock is a Buy with a $73.00 price target. To see the full list of analyst forecasts on Seadrill Limited stock, see the SDRL 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.Date of analysis: Jul 19, 2025