SDRL Should I Buy
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Seadrill Ltd (SDRL) is not a strong buy at this moment for a beginner investor with a long-term strategy. While the company has shown positive growth in revenue and backlog, its recent financial performance, including a net income drop and flat EPS, raises concerns. Additionally, hedge fund selling and mixed analyst ratings suggest caution. The technical indicators are neutral, and there are no strong proprietary trading signals to support an immediate buy decision.
The MACD is positive but contracting, indicating a weakening bullish momentum. RSI is neutral at 49.09, and moving averages are bullish (SMA_5 > SMA_20 > SMA_200). Key resistance levels are at 45.439 and 46.794, with support at 41.054 and 39.699. The stock is trading near its pivot point of 43.247, suggesting limited immediate upside.
Seadrill reported an EBITDA of $353 million for 2025, exceeding expectations.
Contracted backlog grew to $2.5 billion, supported by new contracts.
Management projects 2026 revenues between $1.4 billion and $1.45 billion, with EBITDA expected between $350 million and $400 million.
The company has consistently beaten EPS estimates 100% of the time over the past year.
Hedge funds are selling, with a 239.59% increase in selling activity over the last quarter.
Net income dropped significantly to -$10 million, and EPS fell to 0 in Q4
Mixed analyst ratings, with recent downgrades from Fearnley and Citi.
Offshore drilling activity is not expected to peak until late 2026 or 2027, delaying potential growth.
In Q4 2025, revenue increased by 26.28% YoY to $346 million, and gross margin improved by 160.08% YoY to 13.29. However, net income dropped to -$10 million (-109.90% YoY), and EPS fell to 0 (-100% YoY).
Analyst sentiment is mixed. Barclays raised its price target to $39 but maintained an Equal Weight rating. Fearnley downgraded the stock to Hold with a $43 price target. BTIG raised its price target to $40 with a Buy rating, while Citi downgraded it to Neutral with a $35 price target.
