Seadrill (SDRL) Surges 8.9%: Is This an Indication of Further Gains?

Seadrill (SDRL) shares soared 8.9% in the last trading session to close at $38.16. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6.8% gain over the past four weeks.

Seadrill’s share price surged yesterday, primarily due to the company's announcement of multiple new offshore drilling contracts totaling approximately $235 million. These contracts bolstered its revenue backlog and enhanced earnings visibility into 2026–2027. Key awards included a $157 million ultra-deepwater drillship contract for the West Capella in Malaysia, starting in Q2 2026 for 440 days, with a $5 million mobilization fee; a $78 million accommodation contract for the West Elara with Equinor in Norway from Q3 2026 through Q4 2027, which netted a $23 million increase after resolving prior commitments and an extension of the West Carina drillship's existing contract in Brazil through April 2026. These deals highlight strong demand for Houston, TX-based oil and gas drilling company's high-specification rigs amid the revival of deepwater activity in key regions, prompting investor optimism.

This offshore drilling services provider is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of -93.5%. Revenues are expected to be $332 million, up 14.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Seadrill, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SDRL going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Seadrill is a member of the Zacks Oil and Gas - Drilling industry. One other stock in the same industry, Helmerich & Payne (HP), finished the last trading session 3.2% higher at $33.01. HP has returned 13.9% over the past month.

Helmerich & Payne's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.13. Compared to the company's year-ago EPS, this represents a change of -81.7%. Helmerich & Payne currently boasts a Zacks Rank of #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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