SFL Corporation (NYSE:SFL): Valuation Insights Following Follow-On Equity Offering and Dividend Reinvestment Plan

SFL Corporation (NYSE:SFL) just announced a follow-on equity offering, including 10 million new common shares priced at $8.14 each. The offering specifically features a dividend reinvestment plan. This move aims to raise $81.4 million in fresh capital.

See our latest analysis for SFL.

SFL’s follow-on offering comes after a volatile run, with a 13.7% jump in the past month helping to offset much of this year’s earlier slump. Even so, the share price remains down 21.1% year-to-date and the total return over the last year stands at -12.3%. Long-term holders have still seen an 88.5% total return over five years. Momentum is trying to build again as investors weigh fresh capital plans against recent underperformance and the company’s long-term value story.

If new fundraising moves have you looking for more, this is a great moment to broaden your search and discover fast growing stocks with high insider ownership

With SFL’s shares trading well below analyst price targets but facing recent business headwinds, the key question for investors is whether today’s discounted price reflects hidden value or if the market is already anticipating future growth.

Most Popular Narrative: 12.7% Undervalued

At a last close of $8.23, SFL’s widely followed narrative fair value estimate sits at $9.43. The valuation calls for a notable upside, based on forward expectations for the company’s earnings power and underlying business drivers.

SFL’s diversified fleet structure, with significant exposure to container vessels and strong, long-term charters to investment-grade counterparties, provides stable recurring revenue streams, high fleet utilization (98%+), and resilience against market volatility. This underpins predictable earnings and dividend coverage.

Read the complete narrative.

Want to know the math fueling this bullish projection? The valuation rides on ambitious assumptions about future profit margins, revenue stability, and a premium price multiple. See which secret moves in SFL’s business plan could justify this upside. Dive deeper for the full, numbers-backed story.

Result: Fair Value of $9.43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain if soft drilling markets persist or if SFL faces tougher conditions in redeploying high-value assets, which could pressure future returns.

Find out about the key risks to this SFL narrative.

Another View: What Does the DCF Model Say?

Taking a different approach, our SWS DCF model lands close to the current share price and estimates SFL’s fair value at $8.11. On this basis, the stock appears to be fairly valued, which challenges the more optimistic target from the narrative method. Which perspective better fits today’s reality?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out SFL for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 920 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own SFL Narrative

If you think the story deserves a different twist or want to dig into the numbers on your own terms, you can easily build your version in just a few minutes. Do it your way

A great starting point for your SFL research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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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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