A Look at Valaris (NYSE:VAL) Valuation Following Major $140M Drilling Contract With BP

Valaris (NYSE:VAL) has secured a significant five-well drilling contract with BP Exploration Delta Limited for its VALARIS DS-12 drillship in Egypt. The deal, valued at approximately $140 million, is expected to commence in the second quarter of 2026.

See our latest analysis for Valaris.

Valaris’s latest $140 million contract with BP highlights how the company is executing its strategy to secure steady, long-term work. While the share price has climbed 11.4% year-to-date and rallied over 5.7% in the past 90 days, the total shareholder return over the last year remains slightly below flat. Momentum appears to be picking up following a muted stretch, which suggests renewed confidence as operational wins start translating to market optimism.

If news of Valaris’s contract has you curious about other industrial momentum plays, now’s a perfect opportunity to broaden your search and discover fast growing stocks with high insider ownership

With shares rebounding and a major new contract now in hand, is Valaris trading at a bargain, or has the market already priced in the potential for future growth?

Most Popular Narrative: 3.8% Undervalued

With Valaris trading at $50.12 and the narrative’s fair value at $52.10, market participants see the shares as modestly undervalued. Here is a key perspective shaping that outlook.

The company’s $4.7 billion contract backlog, its highest of the decade, reflects continued success in winning attractive, multi-year contracts for its high-specification fleet, supported by robust global offshore activity and rising demand for deepwater projects. This strong backlog visibility points to increasing future revenue and earnings stability.

Read the complete narrative.

What is really driving this price target? The narrative’s value rests on a powerful combination of backlog strength, future margin expansion, and a lower future profit multiple than the industry standard. Want to see the assumptions that could set the stage for a surge? Dig into the full story behind these forecasts.

Result: Fair Value of $52.10 (UNDERVALUED)

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

However, shifts in environmental regulation or sudden rig oversupply could quickly erode contract opportunities and put pressure on both revenue and margins for Valaris.

Find out about the key risks to this Valaris narrative.

Build Your Own Valaris Narrative

If you’ve got your own take or want to dig deeper into Valaris’s story, you can use our tools to build a fresh perspective in just a few minutes. Do it your way

A great starting point for your Valaris research is our analysis highlighting 3 key rewards 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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