SDRL Should I Buy
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Seadrill Ltd (SDRL) is not a strong buy for a beginner, long-term investor at this moment. While the technical indicators show some bullish trends, the company's financial performance is weak, with declining net income and EPS. Additionally, hedge funds are selling, and analysts have recently downgraded the stock. The options data does not indicate strong bullish sentiment, and there are no significant positive catalysts to justify an immediate purchase.
The stock shows bullish moving averages (SMA_5 > SMA_20 > SMA_200), and the MACD is positive but contracting. RSI is neutral at 57.949, and the stock is trading near its pivot level of 40.155. However, the pre-market price has dropped slightly (-0.15%), and the stock trend analysis suggests a potential decline in the next week and month.
The offshore drilling market shows potential for increased activity later in the year, as noted by BTIG. The stock has bullish moving averages, and the MACD is positive.
Hedge funds are selling heavily, with a 239.59% increase in selling activity over the last quarter. Analysts have downgraded the stock recently, citing valuation concerns and risks related to contract resets. Financial performance is weak, with significant declines in net income, EPS, and gross margin.
In Q3 2025, revenue increased by 5.39% YoY to $352 million. However, net income dropped by -134.38% YoY to -$11 million, EPS fell by -138.30% YoY to -0.18, and gross margin declined by -31.70% YoY to 15.34.
Recent analyst actions include a downgrade by Fearnley to Hold with a $43 price target and a downgrade by Citi to Neutral with a $35 price target. BTIG raised the price target to $40 but maintained a Buy rating. Overall, analysts are cautious about the stock due to valuation concerns and market risks.
