Seadrill still a Buy on revenue resilience, Citi says

|About: Seadrill Limited (SDRL)|By:, SA News Editor

Even as deepwater rig markets are softening, Seadrill (SDRL -0.4%) has created a workable path for “resilient earnings” in the next three years, Citigroup analysts say, including the premium SDRL can charge for part of its drilling fleet and its ability to secure a multi-year contract with Rosneft that isn’t affected by current sanctions against Russia.

Given the combination, Citi sees more than 70% of SDRL's revenues covered through 2016, giving SDRL earnings power 10% above the current consensus over that period; positive macro industry trends also could boost the stock over time, the firm says.

Citi's stance is in the minority: Deutsche Bank downgraded several offshore drillers yesterday (not SDRL), and Global Hunter downgraded SDRL last week.