SDRL - Seadrill: Prepare For Earnings Inflection Next Year Buy
2024-03-26 01:10:47 ET
Summary
- Leading offshore driller Seadrill reported fourth quarter and full-year 2023 results in line with management's projections.
- While the company generated $92 million in free cash flow, margins were impacted by a material increase in operating expenses.
- Seadrill authorized a new $250 million share buyback program and expects a year of transition in 2024 with elevated out-of-service time and reduced profitability.
- Management expects 2024 to be a transition year with elevated out-of-service time resulting from a heavy special periodic survey schedule and material contract preparation requirements for the drillships West Auriga and West Polaris.
- However, 2025 should see an inflection in earnings and cash generation for the company. Consequently, I am reiterating my "Buy" rating on the shares with a slightly reduced price target of $60.
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. ...
Seadrill: Prepare For Earnings Inflection Next Year, Buy