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Odfjell Drilling (OB:ODL) Could Be 14% Undervalued On Tax Case Conclusion

Simply Wall St · 21h ago

Tax case conclusion reshapes near term context for Odfjell Drilling

Odfjell Drilling (OB:ODL) is back in focus after Norway’s Supreme Court appeals committee declined to hear the Tax Authority’s case, finalising a long running tax dispute in the company’s favour.

The ruling confirms that Odfjell Offshore Ltd. will recover the NOK 307 million upfront tax payment for 2017 to 2021, which was funded by Odfjell Drilling, along with interest and certain costs. In total, this amounts to about US$37 million.

With the tax case now closed and NOK95.2 as the latest share price, Odfjell Drilling enters this new phase after a 30 day share price return of 7.21% and a one year total shareholder return of 35.33%, alongside a very large five year total shareholder return that far exceeds 7x.

Compare how Odfjell Drilling’s tax win fits alongside other companies with robust finances by scanning the list of solid balance sheet and fundamentals (440 results) that analysts are watching closely right now.

Odfjell Drilling now has a clearer balance sheet story and a strong recent share price run. The next step is working out whether that strength is already reflected in the NOK95.2 price or not.

Most Popular Narrative: 14.2% Undervalued

Odfjell Drilling’s most followed narrative points to a fair value of NOK110.98 per share, which sits above the latest NOK95.2 close and frames the current tax windfall in a broader earnings story.

The company has locked in high quality, long term contracts with major customers at increasing day rates, with average day rates rising quarter on quarter and a backlog of $1.7 billion stretching to 2030 for some assets, enhancing revenue visibility and stability for years to come.

Read the complete narrative.

Want to understand why this contract book underpins the NOK110.98 fair value? The narrative hinges on profit margins, modest revenue shifts and a richer earnings multiple that investors may not be fully pricing in yet.

Result: Fair Value of NOK110.98 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Odfjell Drilling’s reliance on a concentrated client base and a limited, regionally focused fleet means contract changes or regulatory shifts could quickly challenge this fair value story.

Find out about the key risks to this Odfjell Drilling narrative.

Another View: What Odfjell Drilling’s P/E Is Telling You

DCF work suggests Odfjell Drilling is trading well below an estimated NOK197.5 per share, which points to an undervalued stock. Yet the current P/E of 10.9x is higher than both peers at 7.9x and the industry at 7.6x, and only slightly under the 11.5x fair ratio. Is that a cushion or a warning sign for you?

See what the numbers say about this price — find out in our valuation breakdown.

OB:ODL P/E Ratio as at Sep 2026
OB:ODL P/E Ratio as at Sep 2026

Next Steps

With mixed signals on valuation and sentiment around Odfjell Drilling, this is a good moment to move quickly and test the numbers yourself. To weigh up the full picture of potential upside against areas of concern, take a closer look at the 3 key rewards and 2 important warning signs.

Looking for more ideas beyond Odfjell Drilling?

If Odfjell Drilling has your attention, do not stop here. Fresh opportunities often emerge where fewer people are looking, so keep widening your search.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.