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Seadrill: Is the Worst Over? -- Barron's Blog

DOW JONES & COMPANY, INC. 9:35 AM ET 11/28/14
Symbol Last Price Change
GS 188.8down +0.88 (+0.47%)
ATW 31.52down -2.57 (-7.54%)
DO 30.64up -1.58 (-4.9%)
SDRL 14.81down -1.18 (-7.38%)
QUOTES AS OF 09:36:06 AM ET 11/28/2014


On Nov. 26, Seadrill ( SDRL) sent investors fleeing when the offshore driller eliminated its dividend. Yesterday, Goldman Sachs(GS) decided it was the perfect time to upgrade Seadrill's shares. Analyst Henry Tarr and team explain why:

We upgrade Seadrill to Neutral from Sell following sharp

underperformance. The stock fell 18% yesterday (November 26) after the company suspended its dividend distributions due to the challenging market conditions. By cutting the dividend the company will improve its balance sheet and now has good visibility through 2015 with c.90% of floater capacity contracted. Seadrill is trading close to replacement cost and to the peer group on 2015E EV/EBITDA. Since adding the stock to the Sell List on September 25, 2014, it is down 33% vs. the sector down 14% and the FTSE World Europe up 5.9% (in Nkr terms).

The upgrade hasn't helped shares of Seadrill--or other offshore drillers today, for that matter, especially those like Transocean ( RIG), Atwood Oceanics(ATW) and Diamond Offshore Drilling(DO) ( DO) that could also cut their dividends. Seadrill has dropped 6.9% to $14.89 at 9:34 a.m., while Transocean has plunged 8.1% to $21.39, Atwood Oceanics(ATW) has tumbled 7.5% to $31.52 and Diamond Offshore Drilling(DO) has fallen 3.9% to $30.97.

More at Barron's Stocks to Watch blog, http://blogs.barrons.com/stockstowatchtoday/

Access Investor Kit for Seadrill Ltd.(SDRL)

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=BMG7945E1057

Access Investor Kit for Atwood Oceanics, Inc.(ATW)

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0500951084

Access Investor Kit for Diamond Offshore Drilling, Inc.(DO)

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US25271C1027

Access Investor Kit for The Goldman Sachs Group, Inc.(GS)

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(END) Dow Jones Newswires
11-28-140935ET
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