Seadrill (NYSE:SDRL) Shares Gap Up on Analyst Upgrade

Key Points

• Citigroup upgraded Seadrill from a sell to neutral and raised its price target to $46 from $32, prompting the shares to gap up (opened $44.14 vs. prior close $42.40).
• Analyst coverage is mixed but averages to a "Hold" with an average target of $48, as brokerages range from Strong Buy to Strong Sell and several have recently adjusted targets.
• Seadrill beat quarterly expectations (EPS $0.12 vs. $0.07 expected; revenue $362M vs. $335.4M) and is highly institutionally owned (about 95.7% of shares), though it still shows a negative P/E and ~$2.73B market cap.

Seadrill Limited (NYSE:SDRL - Get Free Report) gapped up prior to trading on Thursday after Citigroup upgraded the stock from a sell rating to a neutral rating. The stock had previously closed at $42.40, but opened at $44.14. Citigroup now has a $46.00 price target on the stock, up from their previous price target of $32.00. Seadrill shares last traded at $44.0910, with a volume of 300,373 shares trading hands.

A number of other brokerages have also issued reports on SDRL. BTIG Research raised their price target on Seadrill from $33.00 to $40.00 and gave the stock a "buy" rating in a research note on Friday, January 9th. Weiss Ratings downgraded Seadrill from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Tuesday, January 6th. BWS Financial reissued a "buy" rating and set a $80.00 target price on shares of Seadrill in a research note on Friday, January 23rd. Zacks Research downgraded shares of Seadrill from a "hold" rating to a "strong sell" rating in a research note on Monday, February 16th. Finally, Barclays lifted their price objective on shares of Seadrill from $39.00 to $41.00 and gave the company an "equal weight" rating in a report on Monday. One research analyst has rated the stock with a Strong Buy rating, two have given a Buy rating, three have assigned a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Hold" and an average target price of $48.00.

Institutional Trading of Seadrill

Hedge funds have recently bought and sold shares of the stock. Raymond James Financial Inc. purchased a new position in Seadrill in the second quarter valued at about $27,000. Aquatic Capital Management LLC purchased a new position in shares of Seadrill in the 3rd quarter worth approximately $44,000. EverSource Wealth Advisors LLC bought a new position in shares of Seadrill during the 2nd quarter worth approximately $42,000. CIBC Private Wealth Group LLC purchased a new stake in Seadrill during the third quarter valued at approximately $61,000. Finally, Farther Finance Advisors LLC lifted its position in Seadrill by 19.7% during the third quarter. Farther Finance Advisors LLC now owns 2,086 shares of the oil and gas company's stock valued at $63,000 after acquiring an additional 343 shares during the last quarter. Hedge funds and other institutional investors own 95.67% of the company's stock.

Seadrill Trading Up 3.0%

The company's 50 day simple moving average is $38.67 and its two-hundred day simple moving average is $33.81. The company has a market capitalization of $2.73 billion, a price-to-earnings ratio of -35.24 and a beta of 1.45. The company has a quick ratio of 1.89, a current ratio of 2.03 and a debt-to-equity ratio of 0.21.

Seadrill (NYSE:SDRL - Get Free Report) last posted its quarterly earnings data on Wednesday, February 25th. The oil and gas company reported $0.12 earnings per share for the quarter, topping analysts' consensus estimates of $0.07 by $0.05. Seadrill had a negative return on equity of 2.07% and a negative net margin of 5.36%.The firm had revenue of $362.00 million during the quarter, compared to analysts' expectations of $335.36 million. As a group, research analysts anticipate that Seadrill Limited will post 1.86 earnings per share for the current fiscal year.

About Seadrill

Seadrill Limited, trading on the New York Stock Exchange under the symbol SDRL, is a leading provider of offshore drilling services to the global oil and gas industry. The company specializes in the design, construction, deployment and operation of mobile offshore drilling units, serving major exploration and production companies with turnkey drilling solutions.

Seadrill’s fleet comprises ultra-deepwater drillships, semi-submersible rigs and high-specification jack-up units capable of operating in some of the world’s most challenging offshore environments.

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