NEW YORK (TheStreet) -- Seadrill (SDRL - Get Report), the world's largest offshore driller, is having a difficult time convincing the market that the current setback in fleet utilization is not indicative of an adverse change in business outlook.
The stock closed Friday at $38. And despite having reported solid first-quarter results, these shares, are down 5% year to date, have barely moved. And with better-than-expected results already in hand from Transocean (RIG - Get Report) and Ensco (ESV), there are now concerns that both are taking business away from Seadrill.
In this video, energy analyst Richard Saintvilus explains why the stock is heading to $45. Saintvilus argues that Seadrill should benefit from a secular shift toward ultra-deepwater offshore drilling. That and its attractive fleet characteristics should spur improved fleet utilization going forward.
With Seadrill stock still down 5% year-to-date, I see this as a great buying opportunity. On the basis of long-term recovery in drilling demand and improved fleet characteristics, I project Seadrill's fair value to reach $45 by the end of the year.
At the time of publication, the author held no position in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.