Seadrill $SDRL: Wall Street Analysts’ Recommendations

Seadrill’s 3Q15 earnings

Seadrill (SDRL) will announce its 3Q15 earnings results on November 26, 2015. Wall Street analysts estimated the company’s 3Q15 EBITDA ( earnings before interest, tax, depreciation, and amortization)  to be $502 million. Analysts have lowered their 3Q15 EBITDA estimates from the three-month prior estimate of $555 million.

Stock performance

From August 27, 2015, when Seadrill (SDRL) announced its 2Q15 results, until October 29, 2015, its stock price dropped by 14%. From October 1 to October 28, the company’s share price appreciated by 8%. The share prices for other major offshore drilling (OIH) (IYE) (XLE) companies appreciated as follows:

• Diamond Offshore (DO): 18%
• Noble (NE): 19%
• Ensco (ESV): 16%
• Transocean (RIG): 22%
• Atwood Oceanics (ATW): 9%
• Rowan Companies (RDC): 20%
• Pacific Drilling (PACD): 23%

New contracts for several companies in October brought positive sentiments in the offshore drilling industry, leading to a jump in share prices. To read more about fleet reports in October, please refer to Offshore Drillers’ October Fleet Reports: Good News, Bad News.
Wall Street analysts’ target price

Wall Street analysts have a 12-month target price of $7.65 for Seadrill (SDRL) against the current price of $6.16 on October 27. Of these analysts, 14% recommend a buy, 30% recommend a hold, and 56% recommend a sell, according to a Bloomberg consensus.

Analyst estimates provide crucial information when looking at target prices. Last year, when Seadrill was trading at $23.80, analysts had a 12-month target price of $28.50, but the stock tumbled in the last year.

In the next few articles, we’ll analyze the analysts’ outlooks and determine whether they are optimistic or pessimistic in assessing Seadrill’s future. We’ll also analyze some key events with respect to Seadrill that took place during and after 2Q15.