Just wondering why the target price is so low. With the dividend where it is and interest rates where they are I would think this should have a higher target price. and a higher p/e. Bought some april 2011 calls for like $1.50 this morning
Two recent analyst target prices for Seadrill are $29 ( by Dahlman) and $30 ( by HSBC). Considering that these targets represent a 25% upside, and with the stock paying a 10% dividend, I would conclude that SDRL is definitely undervalued.
Ma I add, that, ALL Units of SDRL & their recent aquisition of Score are ALL fixed, 2 FIRST Class Charterers (Being Govermental Cos. Like Petrobas or a Major oil Cos.
All units in SDRL hv good fixed rates of some 600/650.000 per day, for the next 2 years. Talk abt. safe Haven. And think IF something happens with regards to Iran and Hormuz Straight being closed for any reason. Like f.ex. Owners of tankers, the Insurance Premium wud B Colossol + they hv 2 think of the safety of the various Crews !
If their are fewer buyers and more sellers valuations are useless. The stock market is pretty much headed the same direction as the real estate market. Lots of scared "Wabbits" out there and the rest have no carrots to spend. Right now what is important is; do you own it? Liquidity versus debt is the name of the game. The answer to why Seadrill is cheap is they have debt. Upside is they have a nice backlog. Now if they can maintain the backlog for a couple more years we are looking good.