The Zhitong Finance App learned that Citi released a research report to raise Seadrill (SDRL.US) rating from “neutral” to “buy” and rated it as the preferred stock for offshore drilling companies, but adjusted the target price from $60 to $52.

Citi expects the company's free cash flow yield to exceed 20% by 2026, the best in the industry.

Analyst Scott Gruber also pointed out that Seadrill has excellent acquisition potential, Transocean (RIG.US) is considered a potential buyer, and believes Seadrill will update its drilling platform in Brazil at a “steady” pace.

Second, Gruber is optimistic about NB.US (NB.US) because with the completion of the Diamond Offshore acquisition, buybacks may increase. He expects revenue for the 2026 fiscal year to be 4.3 billion dollars, EBITDA of 1.88 billion dollars, and free cash flow of 1.14 billion dollars, followed by Valaris (VAL), which has the highest quality idle production capacity.

Citi downgraded Transocean's rating from purchase to neutral. The latest target price is $4.50, saying that the company has the largest inventory coverage, so the risk of revising the updated estimate is minimal, but its stock price has a premium over the bank's more conservative estimate, and the repurchase “has yet to appear.”