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.
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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."
Separately, TheStreet Ratings team rates SEADRILL LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SEADRILL LTD (SDRL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."