EVENTS:   The Roaring 2020s or a Rerun of the 1970s? - Edward Yardeni/Yardeni Research - 24 Mar 26   Best Equity Short Ideas Conference Call 13 - Thomas Chanos/Badger Consultants & Dr. Aaron Fletcher/Bios Research & Jonathan Telgener/Channel Dynamics & Ed Steele/Iron Blue Financials & John Zolidis/Quo Vadis Capital & Mark Hiley/The Analyst - 26 Mar 26     ROADSHOWS: Chinese Equity Ideas & Channel Checks Across 50 sub-sectors - Don Ma /Horizon Insights   •   London   23 - 27 Mar 26       Long Short European Equity Research - Harry Grist /The Analyst   •   New York   26 Mar 26       Fundamental US Healthcare Short Ideas - Dr Elliot Favus /Favus Institutional Research   •   London   27 - 27 Mar 26      
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Seadrill (SDRL)

Energy

BWS Financial

An overhang for drill ship owners has been the energy producers slowing contract activity on the expectation there would be more supply, especially from recommissioning stacked drill ships. However, Hamed Khorsand does not believe this will be the case since many of these assets have been stacked for several years and owners have used them as a source for parts. Supply constraints should persist for the foreseeable future and push day rates above the $500,000 threshold on a consistent basis this year. SDRL would further benefit from such a scenario with 40% of its fleet due for contract renewals next year. Hamed increases his TP to $80 (60% upside).

Edition: 184

- 19 April, 2024


Seadrill (SDRL)

Energy

BWS Financial

A sea of profits - with expectation of no new ship builds to saturate anytime soon the current day rates should hold over the next 2-3 years. SDRL emerged from bankruptcy protection in early 2022 and listed its shares in Oct. Since then, it has undertaken asset sales to increase its cash balance, which has resulted in the group having more cash than debt - a rare trait for the industry. However, despite the lean balance sheet, the stock continues to trade at a discount to peers. Furthermore, the pending purchase of Aquadrill will substantially increase SDRL's liquidity and earnings power. TP $59 (40% upside).

Edition: 153

- 03 February, 2023