Seadrill Limited (NYSE:SDRL) just released its quarterly report and things are looking bullish. Seadrill delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$449m-17% above indicated-andUS$0.47-72% above forecasts- respectively Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Seadrill after the latest results.

Taking into account the latest results, the current consensus from Seadrill's six analysts is for revenues of US$1.53b in 2026. This would reflect a modest 3.6% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 3,170% to US$0.52. In the lead-up to this report, the analysts had been modelling revenues of US$1.50b and earnings per share (EPS) of US$0.53 in 2026. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.

As a result, it might come as a surprise that the consensus price target has been cut 5.2% to US$53.33, which could suggest that these earnings are considered less valuable by the market than previously. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Seadrill at US$80.00 per share, while the most bearish prices it at US$26.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Seadrill's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 7.3% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.0% annually. Factoring in the forecast slowdown in growth, it looks like Seadrill is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Seadrill going out to 2028, and you can see them free on our platform here.

Even so, be aware that Seadrill is showing 3 warning signs in our investment analysis , you should know about...

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.