Seadrill (Buy, TP: NOK600.00) - Transition year well understood
We believe the relatively muted 2024 earnings profile is well understood by investors, and consensus has been revised lower in recent months. With solid prospects for the high end of the fleet, a key focus is to build backlog for the tier-2 rigs to help de-risk the earnings profile. We find the industry-leading buyback programme accretive to the valuation. With investor focus shifting to 2025–2026, the 2026e EV/EBITDA of 2.3x and cash-flow yield to EV of 25% support our BUY and NOK600 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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