Source: Investing Posted 27/09/2024, 13:40
JPMorgan Chase & Co. revised its forecast for Nabors Industries Ltd (NYSE:NBR), lowering the company’s stock target price to $75.00 from $94.00 previously, while maintaining a “subweight” rating. The company expects the financial results for the third quarter of Nabors to be in line with general market expectations and the company’s own guidance. Profit before interest, tax, depreciation and amortization (EBITDA) is expected For the third quarter of 2024 is about $220 million, which is slightly below the market estimate of $224 million.
Napors recently revealed at an investor conference that the number of rig suspensions in Saudi Arabia has risen to three. Although these rigs are currently operating, they are expected to become idle starting in the fourth quarter of 2024. JPMorgan Chase & Co. expects the number of international drilling rigs to reach 85 for the third quarter of 2024, with a daily margin increase of $152, reaching the minimum guidance Napurs for margin between $16.2K and $16.3K.
In the US, Napurs faces a higher platform turnover rate, which could result in a slight decline in platform usage compared to its guidance. The number is expected to be around 67 platforms in the bottom 48 states on average for the third quarter, which is lower than the company’s guidance and JPMorgan Chase & Company’s previous assumption of 70 platforms.
For the fourth quarter, the number is expected to rise to an average of 69 platforms. It is worth noting that daily prices in the US land sector range between 30 A thousand dollars in the low to medium range, with recent fixations heading towards the lower end. Despite these challenges, Napurs is expected to meet its third-quarter earnings before interest, tax, depreciation and amortization (EBITDA) target of $34 million for its NDS segment , thanks to strong third-party activity.
JPMorgan Chase & Co. revised its estimates of earnings before interest, tax, depreciation and amortization (EBITDA) for 2024 and 2025 to $882 million and $935 million, down from $893 million and $990 million, respectively. Similarly, the free cash flow forecast for 2024 and 2025 was lowered to $137 million and $118 million from the previous estimate of $151 million and $175 million. New target price for December 2025 based on benchmark free cash flow analysis.
In other recent news, Nabors Industries has seen significant developments in its financial outlook and operations. Citi recently downgraded Napurs stock rating from “buy” to “neutral,” citing a more conservative look at the company’s earnings before interest, tax, depreciation and amortization (EBITDA) and free cash flow (FCF). for 2025. Nabors’ revised forecast indicates that EBITDA for 2025 will be $934 million, down 5% from the general alignment, and a significant drop in the company’s free cash flow for 2025 to $90 million, more than 50% below the overall consensus. In addition, Napurs reported a strong second quarter in 2024, with gross earnings before interest, tax, depreciation and amortization (EBITDA) beating expectations. Despite a 6% decline in the number of rigs in the lower 48 states, the company maintained strong daily margins and reported revenue growth in its international operations and other sectors. The company’s revenues from operations amounted to 735 m Leon dollars, with significant growth in the international drilling sector, drilling solutions and rig technologies .
Nabors Industries also made progress in sustainability and debt reduction, with net debt down by nearly $50 million to $2.04 billion. The company plans to deploy five additional drilling rigs internationally over the course of 2024, with the aim of achieving growth in the international market and focusing on advanced technology solutions. Modern metrics and analyst insights paint from a detailed picture of Nabors Industries Ltd’s current financial landscape .With a market capitalization of $626.58 million, Napurs is trading near a 52-week low, reflecting the significant decline in the share price over the past year by -52.61%. This is in line with the price target cut and “below weight” rating from JPMorgan Chase & Co. The company’s price-to-profitability (P/E) ratio is -3.34, indicating that the company has been unprofitable for the past twelve months, a trend analysts expect to continue into the year. Current.
