SDRL - Seadrill: Expect More Buybacks Following Qatar Jackup Fleet Sale - Buy

2024-06-04 08:00:00 ET

Summary

• Last month, leading offshore driller Seadrill reported Q1/2024 results largely in line with expectations.
• In recent quarters, the company has repurchased 10.4 million common shares for aggregate consideration of $469 million.
• Following the sale of the Qatar jackup fleet for $338 million in cash proceeds, aggressive buybacks are likely to continue for the time being.
• On a less positive note, SDRL is facing more idle time on a number of floaters next year, which is likely to weigh on profitability going forward. However, the potential impact should be more than offset by accretion from additional share repurchases.
• With a best-in-class balance sheet and strong focus on shareholder capital returns, Seadrill remains one of the most solid investments in the offshore drilling industry. Reiterating "Buy" rating with an increased price target of $62.

Note:

Seadrill Limited ( SDRL ) has been covered by me previously, so investors should view this as an update to my earlier articles on the company. ...

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