NEW YORK (TheStreet) --Seadrill Limited (SDRL) shares were downgraded to "buy" from "neutral" by analysts at Bank of America Merrill Lynch (BAC) on Thursday.
The stock is down 0.6% to $32.92 in early market trading today. The firm dropped its price target to $36 from $46.
Must Read: Warren Buffett's 10 Favorite Growth Stocks
BofA Merrill Lynch believes that earnings will reduce by as much as 15% due to lower offshore drilling demands.
"We downgrade Seadrill to Neutral as we are no longer confident the driller can be resilient to the downturn in offshore drilling demand," said analysts. "This leads us to cut our earnings by 15% 2014-16, leaving Seadrill the most expensive offshore driller."
- The revenue growth came in higher than the industry average of 8.2%. Since the same quarter one year prior, revenues rose by 21.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for SEADRILL LTD is rather high; currently it is at 58.13%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.72% is above that of the industry average.
- Net operating cash flow has significantly increased by 104.14% to $492.00 million when compared to the same quarter last year. In addition, SEADRILL LTD has also vastly surpassed the industry average cash flow growth rate of 23.27%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 1200.0% when compared to the same quarter one year prior, rising from -$21.00 million to $231.00 million.
- You can view the full analysis from the report here: SDRL Ratings Report
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV