Nabors Spurts to 52-Week High on Earnings Beat - Analyst Blog
February 24 2014 - 4:00PM
Zacks
Shares of Nabors Industries
Ltd. (NBR) hit a 52-week high of $22.77 on Feb 20. In
fact, the Hamilton, Bermuda-based onshore contract driller has seen
its stock price climb some 20% over the past five days. This price
appreciation can be attributed to the recent better-than-expected
earnings report.
Why the Bullishness?
Nabors, which ranks ahead of Patterson-UTI Energy
Inc. (PTEN) as the largest North American onshore
contractor, has a large, high-quality fleet of drilling and
workover rigs. Over the years, the company has grown through cash
flow reinvestments and acquisitions. In the process, Nabors has not
only increased its rig fleet, but also extended its geographic
reach and diversified its operating assets beyond land rigs.
Nabors reported fourth quarter earnings from continuing operations
(excluding tax benefits) of 26 cents on Feb 18, beating the Zacks
Consensus Estimate by 30%. Revenues of $1,606.5 million were also
up from the previous-year figure of $1,602.0 million. The
outperformance was primarily due to impressive gains from
international operations. Shares of the company popped more than
13% on Wednesday following the stellar numbers.
Finally, we welcome Nabors’ last year’s announcement to start
paying out a portion of its earnings in the form of shareholder
dividends. We believe that the dividend start-up not only
highlights Nabors’ commitment to create value for shareholders but
also underlines the energy equipment supplier’s confidence in its
business going forward.
Zacks Rank & Stock Picks
With Nabors shares trading at 52-week high, any upside from here
may be limited, as suggested by the company's Zacks Rank #3
(Hold).
Some better-ranked stocks in the ‘Oil & Gas Drilling’ sector
include Helmerich & Payne Inc. (HP) and
Seadrill Partners LLC (SDLP). Both of them carry a
Zacks Rank #1 (Strong Buy).
HELMERICH&PAYNE (HP): Free Stock Analysis Report
NABORS IND (NBR): Free Stock Analysis Report
PATTERSON-UTI (PTEN): Free Stock Analysis Report
SEADRILL PTNRS (SDLP): Free Stock Analysis Report
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