| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 67.46 | 75 |
| Intrinsic value (DCF) | 13.17 | -66 |
| Graham-Dodd Method | 75.71 | 97 |
| Graham Formula | 16.94 | -56 |
Seadrill Limited (NYSE: SDRL) is a leading offshore contract drilling services provider, catering to the global oil and gas industry. Specializing in harsh-environment, floater, and jack-up rig operations, Seadrill owns and operates a diversified fleet of 21 offshore drilling units, including drillships, semi-submersibles, and jack-up rigs. The company serves a prestigious clientele, including oil super-majors, state-owned national oil companies, and independent energy firms. Headquartered in London, Seadrill operates in both benign and ultra-deep-water environments, positioning itself as a key player in the offshore drilling sector. With a strong focus on operational efficiency and safety, Seadrill leverages its modern fleet and technical expertise to capitalize on the growing demand for offshore drilling services amid rising global energy needs. The company’s strategic fleet composition and global footprint make it a competitive force in the energy sector.
Seadrill presents a compelling investment case due to its modern fleet, diversified operations, and strong financial performance, with $1.39B in revenue and $446M in net income. The company’s low debt-to-equity ratio ($618M debt vs. $478M cash) and positive EPS ($6.74 diluted) signal financial stability. However, its high beta (1.606) indicates volatility, reflecting sensitivity to oil price fluctuations and geopolitical risks. The lack of dividends may deter income-focused investors, but Seadrill’s operational cash flow ($88M) and zero capital expenditures suggest efficient capital allocation. Investors should weigh its exposure to cyclical oil demand against its competitive positioning in offshore drilling.
Seadrill’s competitive advantage lies in its modern, high-specification fleet, which is critical in securing contracts with major oil companies requiring advanced drilling capabilities. The company’s focus on harsh-environment and ultra-deep-water rigs differentiates it from competitors with older, less efficient fleets. Seadrill’s operational expertise and global reach allow it to serve clients in key offshore basins, including the North Sea, Brazil, and West Africa. However, the offshore drilling industry remains highly competitive, with pricing pressure and rig oversupply posing risks. Seadrill’s post-bankruptcy restructuring has strengthened its balance sheet, but competitors with larger fleets or stronger financial backing may outperform in long-term contracts. The company’s ability to maintain high utilization rates and dayrates will be crucial in sustaining its market position amid industry recovery.