Seadrill (Buy, TP: NOK550.00) - While waiting for the cash flow
With several asset transactions and the Aquadrill transaction completed, Seadrill is back as one of the leading deepwater companies and has achieved a net cash position. From 2024, the cash generation is set to be meaningful, and we estimate it has the potential to return around a third of its current market cap in 2024–2025e and still maintain a net cash position. With some legacy debt instruments still on its balance sheet, we believe a refinancing will be a trigger to unlock the potential for cash to come shareholders’ way. We reiterate our BUY and NOK550 target price.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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