The Bull Case For Seadrill (SDRL) Could Change Following New Rig Contracts and Updated 2025 Guidance

• In early August 2025, Seadrill announced two new contracts for its West Vela and Sevan Louisiana rigs, while also updating its full-year 2025 revenue guidance to a range of US$1.32 billion to US$1.38 billion (excluding US$50 million in reimbursable revenues).
• Alongside these developments, management highlighted accelerating exploration activity and ongoing contract negotiations in key offshore regions, reflecting renewed operational momentum and positioning for market recovery.
• We'll examine how the company's updated earnings guidance and new contract wins might reshape Seadrill's investment narrative.

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Seadrill Investment Narrative Recap

To be a Seadrill shareholder today, you need to believe in a recovery in offshore drilling that translates into stronger utilization and day rates, while the company navigates short-term margin pressure and exposure to contract delays in key markets. The recent contract wins and updated revenue guidance suggest some positive momentum, but the most important near-term catalyst remains the pace of contract awards, particularly in Angola and Brazil. The biggest risk continues to be revenue volatility if administrative or political delays in these regions persist, and this update does not materially reduce that concern.

Among recent announcements, the August 2025 earnings report best reflects the challenges that underpin current risks and catalysts. Despite consistent year-on-year revenue, Seadrill posted a net loss, driven by softer utilization and day rate pressures, reaffirming why contract visibility and stable utilization remain critical ahead of any sector recovery. Higher contract activity, if sustained, may eventually address these pressures, but for now, the company’s results reinforce how dependent near-term performance is on continuous new awards and fewer idle rigs.

However, investors should be aware that if contract delays persist longer than anticipated or if day rate pressure remains unresolved...

Read the full narrative on Seadrill (it's free!)

Seadrill's narrative projects $1.6 billion in revenue and $319.9 million in earnings by 2028. This requires a 7.6% yearly revenue growth and a $242.9 million earnings increase from the current earnings of $77.0 million.

Uncover how Seadrill's forecasts yield a $42.71 fair value, a 47% upside to its current price.

Exploring Other Perspectives

Four independent fair value estimates from the Simply Wall St Community range widely from US$42.71 to US$355.63 per share. As market participants weigh this variance, the uncertain timing of contract approvals in regions like Angola stands out, underlining why exploring different viewpoints is essential before making any decisions on Seadrill.

Explore 4 other fair value estimates on Seadrill - why the stock might be worth just $42.71!

Build Your Own Seadrill Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Seadrill research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Seadrill research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Seadrill's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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