Valaris: Mr. Toad's Wild Ride (Rating Upgrade)

Feb. 17, 2025 11:54 AM ETValaris Limited (VAL) StockVAL1 Comment
(15min)

Summary

  • Valaris Limited experienced significant volatility, peaking at $79.92 before dropping to $41, with a potential buy target near the December low.
  • The offshore drilling sector faces challenges like supply chain delays, regulatory approvals, and capital discipline, impacting the timing of new projects until 2026.
  • Valaris' undervaluation, rising day rates, and strong backlog form a compelling buy thesis, but careful entry points are crucial given current market conditions.
  • Despite a positive long-term outlook, I recommend holding VAL at current levels, with a keen interest in buying near the $41 mark.

inhauscreative/E+ via Getty Images

Note: An earlier version of this article appeared in the Daily Drilling Report on Jan. 23rd, 2025.

Introduction

I must confess, that I cringed a bit when I looked up my last article from May

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