VAL - Valaris: Major Earnings Inflection Ahead Buy

2024-06-09 21:24:33 ET

Summary

• Last month, leading offshore driller, Valaris, reported Q1/2024 results handily above expectations, mostly as a result of improved revenue efficiency.
• However, Adjusted EBITDA margin remained weak and cash flow continues to be pressured by elevated capital expenditures.
• Backlog of $4.0 billion reached a new recovery high and was up by 2.5% sequentially as customers exercised priced options for a number of rigs.
• On the conference call, management guided Q2/2024 above consensus expectations and largely reiterated full-year guidance.
• 2025 is likely to be the year of major earnings inflection for Valaris and the offshore drilling industry as a whole. Reiterating "Buy" rating and $92 price target.

Note:

Valaris Limited ( VAL ) 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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