Seadrill Ltd (NYSE:SDRL) investors woke up this morning to a 20% pop in the value of their shares, following the news that John Fredriksen, Seadrill’s chairman and largest shareholder, is plan to lend the oil and gas rig maker as much as $1.2 billion as part of a potential deal with banks and bondholders.
According to Bloomberg’s report, citing people familiar with the matter, “The loan of $800 million to $1.2 billion features in a proposal by a working group of fewer than 10 banks […] The plan would imply a postponement of all bank maturities to at least 2020, helping the lenders avoid outright losses.”
On the ratings front, Seadrill has been the subject of a number of recent research reports. In a report issued on September 23, Credit Suisse analyst Gregory Lewis reiterated a Sell rating on SDRL, with a price target of $1.00, which implies a downside of 53.5% from current levels. Separately, on September 6, Canaccord’s Alex Brooks reiterated a Sell rating on the stock .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Gregory Lewis and Alex Brooks have a total average return of -5.2% and 42.0% respectively. Lewis has a success rate of 43% and is ranked #3780 out of 4197 analysts, while Brooks has a success rate of 95% and is ranked #133.
Overall, 3 research analysts have rated the stock with a Sell rating, one research analyst has assigned a Hold rating and . When considering if perhaps the stock is under or overvalued, the average price target is $7.50 which is 248.8% above where the stock closed yesterday.
Seadrill Ltd. is an offshore drilling contractor providing offshore drilling services to the oil and gas industry. Its primary business is the ownership and operation of drillships, semi-submersible rigs, jack-up rigs, tender rigs for operations in shallow, mid, deep, and ultra deep-water areas, and in benign and harsh environments. It operates through the following segments: Floaters, Jack-up Rigs, and Tender Rigs. The Floaters segment offer services encompassing drilling, completion, and maintenance of offshore exploration and production wells. The Jack-up Rigs segment offers drilling services, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to jack-up rigs for operations in harsh and benign environments. The Tender Rigs segment operates self-erecting tender barges and semi-submersible tender rigs, which are used for production drilling and well maintenance in Southeast Asia and West Africa.