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Valaris
(NYSE:VAL)
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Rating:65Neutral
Price Target:
$84.00
â–¼(-2.65% Downside)
Action:Reiterated
Date:10/01/26
The score is anchored by solid profitability and an improved balance sheet, plus an attractive low P/E and positive corporate developments (merger progress and backlog growth). These positives are partially offset by the key risk highlighted in financials—weak cash conversion and slightly negative TTM free cash flow—and by bearish technicals with price below major moving averages and negative momentum indicators.
Positive Factors
Backlog and contracted demand
A substantial backlog provides forward revenue visibility and reduces reliance on securing immediate replacement work. New awards across North Sea, Baltic Sea, Middle East, and exploration programs also support fleet utilization and demonstrate continuing customer demand for Valaris rigs.
Negative Factors
Revenue decline and margin compression
Lower revenue and declining margins indicate that earnings remain sensitive to offshore industry cycles, contract pricing, and cost or asset mix. Continued compression could reduce earnings durability even if reported profitability stays strong, weakening resources available for investment.
Read all positive and negative factors
Positive Factors
Negative Factors
Backlog and contracted demand
A substantial backlog provides forward revenue visibility and reduces reliance on securing immediate replacement work. New awards across North Sea, Baltic Sea, Middle East, and exploration programs also support fleet utilization and demonstrate continuing customer demand for Valaris rigs.
Read all positive factors
Valaris (VAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.45B
Dividend Yield0.68%
Average Volume (3M)1.12M
Price to Earnings (P/E)5.9
Beta (1Y)0.71
Revenue Growth-13.22%
EPS Growth249.28%
CountryUS
Employees3,800
SectorEnergy
Sector Strength52
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)13.47
Shares Outstanding69,435,810
10 Day Avg. Volume1,204,878
30 Day Avg. Volume1,120,881
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)1.12
Price to Sales (P/S)1.50
P/FCF Ratio17.55
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$80.00Price Target Upside-7.29% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)3.03
Revenue Forecast (FY)$2.16B
Valaris Business Overview & Revenue Model
Company Description
Valaris Limited, together with its subsidiaries, provides offshore contract drilling services in Brazil, the United Kingdom, Gulf of America, Australia, Angola, and internationally. It operates through four segments: Floaters, Jackups, ARO, and Ot...
How the Company Makes Money
Valaris primarily makes money by contracting its offshore drilling rigs to oil and gas companies. Its core revenue model is based on (1) dayrate revenue: customers pay a contracted daily rate (dayrate) for the use of a specific rig and crew over a...
Valaris Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong financial and operational performance with significant contract awards and a robust outlook for offshore drilling demand, despite some challenges in maintaining continuous operations and near-term commodity price uncertainties.Positive Updates
Strong Financial Performance
Valaris delivered a strong quarter with adjusted EBITDA of $163 million and free cash flow of $237 million, supported by solid operational performance and a fleet-wide revenue efficiency of 95%.
Negative Updates
Decreased Revenue and EBITDA
Total revenues decreased to $596 million from $615 million in the prior quarter. Adjusted EBITDA also fell from $201 million to $163 million due to fewer operating days and the absence of a prior quarter's nonrecurring benefit.
Read all updates
Q3-2025 Updates
Positive
Negative
Strong Financial Performance
Valaris delivered a strong quarter with adjusted EBITDA of $163 million and free cash flow of $237 million, supported by solid operational performance and a fleet-wide revenue efficiency of 95%.
Read all positive updates
Company Guidance
In the third quarter of 2025, Valaris reported strong financial results, achieving an adjusted EBITDA of $163 million and generating an adjusted free cash flow of $237 million. The company maintained a fleet-wide revenue efficiency of 95% and repurchased $75 million of shares, reflecting a commitment to shareholder returns. Valaris also secured nearly $200 million in new contracts and extensions, increasing its total backlog to $4.5 billion. Notably, the company sold the 27-year-old jack-up VALARIS 247 for $108 million in cash, enhancing financial flexibility. Looking ahead, Valaris anticipates strong demand in the offshore drilling market, with a robust pipeline of opportunities, particularly in deepwater regions, supporting its high-specification fleet. The company remains focused on operational excellence, commercial strategy execution, and disciplined cost and fleet management to deliver long-term shareholder value.Valaris Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
46
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.14B | 2.37B | 2.36B | 1.78B | 1.60B | 1.23B |
| Gross Profit | 872.60M | 593.00M | 601.70M | 240.60M | 219.30M | 164.50M |
| EBITDA | 606.30M | 797.40M | 487.80M | 142.20M | 154.80M | 89.70M |
| Net Income | 939.60M | 982.80M | 373.40M | 865.40M | 176.50M | -4.49B |
Balance Sheet | ||||||
| Total Assets | 5.45B | 5.30B | 4.42B | 4.32B | 2.86B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 541.20M | 606.40M | 368.20M | 620.50M | 724.10M | 608.70M |
| Total Debt | 1.17B | 1.20B | 1.17B | 1.16B | 565.60M | 555.30M |
| Total Liabilities | 2.23B | 2.13B | 2.18B | 2.33B | 1.56B | 1.53B |
| Stockholders Equity | 3.22B | 3.17B | 2.24B | 1.99B | 1.29B | 1.07B |
Cash Flow | ||||||
| Free Cash Flow | -28.52M | 202.70M | -99.70M | -428.60M | -80.00M | -124.90M |
| Operating Cash Flow | 350.84M | 546.20M | 355.40M | 267.50M | 127.00M | -66.00M |
| Investing Cash Flow | -211.10M | -205.60M | -452.30M | -665.80M | -16.70M | -3.70M |
| Financing Cash Flow | -103.58M | -103.60M | -158.30M | 285.50M | -6.40M | 388.70M |
Valaris Technical Analysis
Negative
86.29
Price Trends
82.98
Negative
84.98
Negative
81.98
Negative
Market Momentum
-1.37
Positive
39.30
Neutral
10.84
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VAL, the sentiment is Negative. The current price of 86.29 is above the 20-day moving average (MA) of 83.76, above the 50-day MA of 82.98, and above the 200-day MA of 81.98, indicating a bearish trend. The MACD of -1.37 indicates Positive momentum. The RSI at 39.30 is Neutral, neither overbought nor oversold. The STOCH value of 10.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VAL.
Valaris Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $4.04B | 16.52 | 18.74% | 0.11% | -1.02% | 28.16% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $5.45B | 5.88 | 31.33% | 0.68% | -13.22% | 249.28% | |
64 Neutral | $6.66B | 44.22 | 3.30% | 4.79% | -11.10% | -52.07% | |
63 Neutral | $2.78B | 2,263.00 | 0.03% | 14.83% | 13.06% | -98.53% | |
54 Neutral | $5.85B | -2.84 | -20.24% | 14.08% | 8.54% | -3.69% | |
52 Neutral | $1.20B | -5.23 | -21.28% | 5.63% | 2.71% | -447.50% |
* Energy Sector Average
VAL
Valaris
79.56
29.36
58.49%
TDW
Tidewater
82.18
29.45
55.85%
RIG
Transocean
5.24
1.94
58.79%
BORR
Borr Drilling
4.05
1.25
44.64%
NE
Noble Corporation
41.72
14.30
52.14%
SDRL
Seadrill Limited
45.06
13.85
44.38%
Valaris Corporate Events
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
Valaris-Transocean merger clears key U.S. regulatory hurdle
Positive
Sep 30, 2026
On February 9, 2026, Valaris Limited and Transocean Ltd. entered into a Business Combination Agreement under which Transocean will acquire all outstanding Valaris shares in an all-stock deal, offering 15.235 Transocean shares for each Valaris shar...
Business Operations and StrategyFinancial Disclosures
Valaris boosts backlog with new offshore contract awards
Positive
Aug 5, 2026
As of August 5, 2026, Valaris reported a contract backlog of about $4.6 billion, boosted by more than $160 million in new awards and extensions since its May 4 fleet update. Key additions include a 41-well plug and abandonment campaign and accommo...
M&A TransactionsRegulatory Filings and Compliance
Valaris-Transocean deal advances with key U.S. approval
Positive
Jul 1, 2026
Valaris Limited and Transocean Ltd., both major players in offshore drilling, entered into a Business Combination Agreement on February 9, 2026, under which Transocean will acquire all issued and outstanding Valaris shares in an all-stock deal, of...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.