Seadrill Limited (NYSE:SDRL) Released Earnings Last Week And Analysts Lifted Their Price Target To US$56.43

Seadrill Limited (NYSE:SDRL) just released its latest quarterly results and things are looking bullish. Revenues and losses per share were both better than expected, with revenues of US$358m leading estimates by 10.0%. Statutory losses were smaller than the analystsexpected, coming in at US$0.11 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, Seadrill's five analysts are now forecasting revenues of US$1.47b in 2026. This would be an okay 4.8% improvement in revenue compared to the last 12 months. Seadrill is also expected to turn profitable, with statutory earnings of US$0.36 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.44b and earnings per share (EPS) of US$0.44 in 2026. So it's pretty clear the analysts have mixed opinions on Seadrill after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.

See our latest analysis for Seadrill

The analysts also upgraded Seadrill's price target 9.1% to US$56.43, implying that the higher revenue expected to generate enough value to offset the forecast decline in earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Seadrill, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$45.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Seadrill's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Seadrill's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.8% annually. So it's pretty clear that, while Seadrill's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Seadrill going out to 2028, and you can see them free on our platform here.

You can also view our analysis of Seadrill's balance sheet, and whether we think Seadrill is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.