TDW: Offshore Demand And Tight Vessel Supply Will Drive Shares Higher

Analysts have raised their fair value estimate for Tidewater to $75 from $70, citing a slightly lower required return and higher expected valuation multiples, despite moderating growth and margin assumptions and a more cautious near term stance reflected in recent downgrades to Hold and a $65 price target.

Analyst Commentary

Despite the recent downgrade to Hold and the $65 price target, bullish analysts remain constructive on Tidewater’s long term prospects, highlighting a supportive industry backdrop and the company’s improving competitive position.

They note that the prior run of target upgrades and the latest upward move in fair value to $75 reflect a view that current share weakness may be more cyclical than structural, with earnings power and cash flow potential still trending higher over time.

Bullish Takeaways

• Bullish analysts see the higher fair value estimate as confirmation that Tidewater’s long term earnings profile and asset base warrant a premium to historic valuation ranges, even as near term sentiment cools.
• Positive commentary emphasizes continued operational execution and disciplined capital allocation, which support stronger free cash flow conversion and justify richer valuation multiples over the cycle.
• Several bullish views highlight robust offshore activity and tightening vessel supply as key demand tailwinds, underpinning expectations for sustained day rate strength and margin resilience.
• Supportive forecasts around fleet utilization and contract visibility are cited as catalysts for future upward revisions to estimates, which could re rate the shares toward the raised fair value over time.

What's in the News

• Tidewater updated 2025 earnings guidance, projecting revenue between $1.33 billion and $1.35 billion with full year margins of 49% to 50% (company guidance).
• The company initiated 2026 earnings guidance, targeting revenue between $1.32 billion and $1.37 billion and margin guidance of 48% to 50% (company guidance).

Valuation Changes

• Fair Value Estimate was raised moderately from $70.00 to $75.00 per share, reflecting a higher implied valuation despite more conservative operating assumptions.
• The Discount Rate was reduced slightly from 7.92% to approximately 7.45%, indicating a lower required return and supporting a higher present value of future cash flows.
• Revenue Growth was lowered meaningfully from about 6.11% to roughly 3.12%, signaling more cautious expectations for top line expansion.
• Net Profit Margin was trimmed from approximately 23.91% to about 21.74%, incorporating a modestly weaker long term margin profile.
• Future P/E increased significantly from roughly 9.28x to about 12.62x, implying a richer multiple applied to forward earnings in the updated valuation framework.