Update shared on16 Aug 2025
Fair value Decreased 11%Analysts raised Borr Drilling’s price target to $3.80 as resilient 7G drillship utilization and improved valuation outweighed lingering concerns over offshore activity and sector uncertainty.
Analyst Commentary
- Bearish analysts cite ongoing softness in offshore drilling activity and macro uncertainty, particularly relating to a slowdown in the overall offshore cycle.
- Despite current challenges, 7th generation (7G) drillship utilization remains strong and commands premium pricing compared to 6th generation (6G) floaters, providing some sector resilience.
- The outlook for 2025 is characterized as a transition year, with expectations for muted offshore activity driven by a declining 2026 oil futures curve and uncertainty around OPEC+ production cuts.
- Some previously bearish analysts have improved their stance on valuation grounds, upgrading Borr Drilling from Sell to Hold following recent price adjustments.
- The market continues to see a "flight to quality" dynamic within offshore oil services, though this has not fully offset concerns about the pace of recovery in drilling demand.
What's in the News
- Announced new contract commitments for four premium jack-up rigs, increasing contracted fleet to 23/24 with $129 million in revenue and 84% contract coverage for 2025.
- Completed a follow-on equity offering, raising $102.5 million via issuance of 50 million common shares at $2.05 per share; also filed for an additional $100 million offering.
- Appointed Bruno Morand as incoming CEO, succeeding Patrick Schorn (to become Executive Chairman) effective September 1, 2025.
- Called a special shareholders meeting to set the director cap at eight, elect a new director, and propose increasing authorized share capital.
- Suspended dividend payments to reinforce the balance sheet; buyback program completed with 2.1% of shares repurchased for $20.87 million.
Valuation Changes
Summary of Valuation Changes for Borr Drilling
- The Consensus Analyst Price Target has risen from $3.48 to $3.80.
- The Future P/E for Borr Drilling has significantly fallen from 492.02x to 390.20x.
- The Net Profit Margin for Borr Drilling has risen from 0.24% to 0.26%.
Disclaimer
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