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Seadrill Stock Fell 32% in Week 21

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Nov. 20 2020, Updated 2:52 p.m. ET

Weekly stock performance

After a fantastic run for Seadrill (SDRL) in week 20, the stock fell in the following week. In week 20, Seadrill reached a 52-week high of $0.73. The stock rose more than 98% in week 20. This situation turned around in week 21 (week ending May 25) and the stock fell more than 32%. We already mentioned in our previous article that the stock rise was not based on fundamentals. Also, Seadrill’s technicals suggested the stock was overbought and overvalued. Thus, a fall in Seadrill’s price was expected.

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Peers

All the offshore drilling stocks traded in the red in week 21:

  • Seadrill Partners (SDLP) fell 10.0%.
  • Transocean (RIG) fell 10.1%.
  • Noble (NE) fell 9.4%.
  • Diamond Offshore (DO) fell 9.5%.
  • Rowan Companies (RDC) fell 9.0%.
  • Ensco (ESV) fell 10.2%.

The VanEck Vectors Oil Services ETF (OIH), which has 22.3% of its holdings in oil and drilling stocks, fell 7.8%.

Year-to-date return

Even after week 21’s fall in stock price, Seadrill still has a whopping 82.8% year-to-date return as of May 25. Transocean, Ensco, and Noble also have positive year-to-date returns. On the other hand, Seadrill Partners, Diamond Offshore, and Rowan Companies have a negative year-to-date return of 8.4%, 4.5%, and 2.9%, respectively.

In the next part of the series, we’ll see how analysts revised target prices and recommendations for offshore drilling stocks last week.

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