Valaris Is Up 70% in the Last 30 Days. Here’s Where the Stock Could Head Into 2026

Key Stats for Valaris Limited Stock

• Past 30-Day Performance: 70%
• 52-Week Range: $27 to $96
• Valuation Model Target Price: $160
• Implied Upside: 76%

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What Happened?

Valaris Limited stock shares surged 70% in the last 30 days after Transocean agreed to acquire the company in an all stock transaction valued at approximately $5.8 billion.

The deal creates a scaled offshore driller positioned for what management described as a multiyear upcycle, combining complementary fleets of drillships, semisubmersibles, and jackups while reestablishing the ARO JV relationship with Saudi Aramco.

The stock rallied sharply because the acquisition included an implied premium and materially strengthened the company’s long-term financial profile.

Investors reacted to the more than $200 million in expected annual cost synergies, the pro forma backlog exceeding $10 billion, and management’s plan to reduce leverage to about 1.5x within 24 months, all of which point to stronger free cash flow durability and lower balance sheet risk.

Management emphasized the scale of the combined fleet, which will include 24 seventh generation drillships, 2 eighth generation drillships, and a 31 rig jackup fleet.

Transocean CEO Keelan Adamson stated the transaction “creates significant value for shareholders and customers,” and the companies are targeting a close in the second half of 2026, positioning the combined entity for what they believe is the start of a multiyear offshore recovery.

Institutional positioning also showed continued engagement. Trek Financial LLC opened a new position of 67,774 shares worth about $3.3 million, while Great Lakes Advisors purchased 35,157 shares valued near $1.72 million, signaling professional interest alongside the deal-driven momentum.

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Is Valaris Limited Undervalued?

Under valuation assumptions, the stock is modeled using:

• Revenue Growth (CAGR): 1.3%
• Operating Margins: 21.6%
• Exit P/E Multiple: 25.5x

Revenue growth reflects normalization after 2024 revenue rose 32% to $2.36 billion, based on the TIKR revenue chart, followed by a temporary moderation before recovering toward $2.46 billion by 2027.

This suggests the investment case depends less on rapid top line acceleration and more on sustained offshore demand and disciplined execution.

Deepwater project sanctioning is forecast to increase significantly through 2027, and the combined company will control one of the largest high-specification fleets in the industry.

Greater fleet scale improves bidding leverage, expands geographic reach, and supports participation in longer-duration offshore development programs.

Dayrate progression remains a key driver. Offshore rig supply has tightened after years of underinvestment, meaning incremental utilization gains and contract repricing at higher dayrates can materially expand EBITDA even if overall revenue growth remains modest.

The more than $10 billion backlog provides medium-term revenue visibility, while over $200 million in expected annual synergies supports margin durability.

Based on these inputs, the valuation framework implies a target price of $160, representing roughly 76% upside from recent levels near $91.

At current levels, Valaris appears undervalued if offshore capital spending continues to strengthen into 2026 and pricing power holds, with performance driven by backlog growth, dayrate strength, disciplined capital allocation, and sustained free cash flow generation.

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