SDRL Should I Buy
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Seadrill Ltd (SDRL) is not a strong buy for a beginner investor with a long-term strategy at this moment. While there are positive signs of recovery in the offshore drilling market and analysts have recently upgraded their ratings, the company's financial performance is weak with declining net income and EPS. Additionally, hedge funds are selling, and technical indicators do not show a strong bullish trend. The stock's current price is near its support level, but there is no immediate catalyst to suggest a significant upward move in the short term.
The stock's MACD is negative and expanding downward, indicating bearish momentum. RSI is neutral at 42.827, and the stock is trading near its support level of 42.179. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200), but there is no strong confirmation of an upward trend.
Analysts have upgraded the stock with increased price targets, citing improving market demand and backlog coverage.
The company expects a pronounced recovery in H2 2026 with increased tendering activity.
Q4 EBITDA exceeded expectations by 7%, showing operational strength.
Hedge funds are selling heavily, with a 239.59% increase in selling activity last quarter.
The company's financials show a significant drop in net income (-109.90% YoY) and EPS (-110.13% YoY).
The offshore market is still in a soft patch, and recovery is not expected until H2
Technical indicators do not confirm a strong bullish trend.
In Q4 2025, revenue increased by 26.28% YoY to $346 million, but net income dropped to -$10 million (-109.90% YoY), and EPS fell to -0.16 (-110.13% YoY). Gross margin improved significantly to 13.29%, up 160.08% YoY.
Recent analyst upgrades include Citi raising the price target to $46 from $32 and upgrading the rating to Neutral from Sell. BTIG raised its price target to $50 from $40 with a Buy rating. Barclays raised its target to $41 from $39 but maintained an Equal Weight rating. Analysts are cautiously optimistic about a recovery in H2 2026, but the stock is currently rated as Neutral by some firms.
