Seadrill (Buy, TP: NOK625.00) - Clarity on tier-2 rigs remains key
We are in line with consensus on Q2e EBITDA (USD101m versus USD98m), but just below the guidance on 2024e EBITDA. We remain optimistic about the longevity of the upcycle, but see downside risk to bullish consensus for 2025–2026e (we are c20% below on EBITDA), we believe likely due to consensus being too optimistic on tier-2 deepwater rigs. Nonetheless, we reiterate our BUY and have raised our target price to NOK625 (600) on a higher NAV, helped by FX and buybacks.
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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