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Seadrill: Investors and Analysts Wave Goodbye

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Consensus rating

According to Reuters, Seadrill (SDRL) has a consensus rating of 3.63, which means a “sell.” Noble (NE) has a consensus rating of ~2.97, which means a “hold.” Rowan Companies (RDC) has a consensus rating of ~2.76, which also indicates a “hold.” Ensco (ESV) has a consensus rating of 2.61, which means a “hold.”

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Consensus recommendations

According to Reuters, eight analysts cover Seadrill. Out of these analysts, two recommended a “buy” and none of the analysts recommended a “hold” for the stock. Five analysts recommended a “sell” and one analyst recommended a “strong sell” for Seadrill. The stock hasn’t seen any upgrades or downgrades since 2Q16. In 1Q16, Morgan Stanley, Merrill Lynch, and J.P. Morgan downgraded Seadrill.

Goodbye

Seadrill is in the process of restructuring. With oil prices falling to $45 per barrel, negations with creditors will be more difficult for the company. Seadrill has already warned shareholders that they should expect “minimal” recovery for their existing shares, which resulted in a major sell-off of Seadrill’s shares. The share price has fallen 89.4% since the beginning of the year. Now, Seadrill is a penny stock.

Seadrill isn’t part of the OBX index anymore. The OBX index includes the 25 most liquid companies on Norway’s Oslo Stock Exchange.

As the company’s fundamentals deteriorated, many analysts also dropped Seadrill from their coverage. At the beginning of the year, ten analysts covered the stock. Now, eight analysts cover the stock. Two years ago, Seadrill was very popular among analysts—17 analysts covered the stock.

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