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Did SDRL’s 2Q Results Prompt Changes in Analysts’ Price Targets?

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Seadrill’s ratings

Wall Street analysts have a 12-month price target of $1.81 for Seadrill (SDRL), compared to $2.61 on August 26, 2016. A total of 27 analysts gave recommendations on the company’s stock. None of them gave Seadrill a “buy” recommendation. It has “hold” recommendations from 22% and “sell” ratings from 78%, according to the Bloomberg consensus.

Handelsbanken has issued SDRL the highest target price of $10.26. The lowest target price of $0.12 came from Canaccord Genuity.

After Seadrill’s second-quarter results were released, many analysts revised their 12-month target prices as follows:

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  • Carnegie decreased its price target to $1.21 from $2.07 and maintained a “sell” rating on the stock.
  • JP Morgan increased its target price to $2.31 from $2.26 and maintained a “sell” rating on the stock.
  • Just one day before the earnings, Pareto Securities decreased its target price to $0.97 from $1.92 and maintained a “sell” rating.

Seadrill’s peers

Wall Street analysts’ consensus recommendations for other offshore drillers (XLE) are as follows:

  • Of the nine analysts covering Ocean Rig (ORIG), none of them gave it a “buy,” 22% gave it a “hold,” and 78% give it a “sell.”
  • Of the 38 analysts covering Noble (NE), about 19% of them gave the company a “buy,” 47% gave it a “hold,” and 34% gave it a “sell.”
  • Of the 34 analysts covering Diamond Offshore Drilling (DO), 6% gave it a “buy,” 56% gave it a “hold,” and 38% give it a “sell.”
  • Of the 17 analysts covering Pacific Drilling (PACD), 6% gave it a “buy,” 47% gave it a “hold,” and 47% gave it a“sell.”

In the final part of our series, we’ll see where Seadrill’s valuation stands among its peers.

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