Noble Corp. (NE, Financial) has garnered an upgrade from JPMorgan analyst Arun Jayaram, who has elevated the stock to an Overweight rating from Neutral, setting a price target of $30. Following discussions with the company's management, JPMorgan highlights management's assurance in obtaining additional term contracts for its deepwater floater fleet, aiming to enhance earnings visibility by 2026. Despite acknowledging the current challenges in the deepwater and harsh environment jack-up markets, the firm maintains an optimistic outlook.
The analysis projects that Noble Corp. will produce enough free cash flow to maintain its current dividend through 2025 and 2026. Moreover, successful execution of the projected term work in 2026 could reinforce the stability of the dividend and potentially lead to a reevaluation of the company's market value. This strategic positioning underscores Noble Corp.'s potential for sustained financial health in the coming years.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Noble Corp PLC (NE, Financial) is $32.73 with a high estimate of $40.00 and a low estimate of $21.00. The average target implies an upside of 32.34% from the current price of $24.73. More detailed estimate data can be found on the Noble Corp PLC (NE) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Noble Corp PLC's (NE, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Noble Corp PLC (NE, Financial) in one year is $52.58, suggesting a upside of 112.62% from the current price of $24.73. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Noble Corp PLC (NE) Summary page.
NE Key Business Developments
Release Date: April 29, 2025
- Adjusted EBITDA: $338 million for Q1 2025.
- Free Cash Flow: $173 million for Q1 2025.
- Dividends and Share Buybacks: $80 million in dividends and $20 million in share repurchases during Q1 2025.
- Contract Drilling Services Revenue: $832 million for Q1 2025.
- Adjusted EBITDA Margin: 39% for Q1 2025.
- Cash Flow from Operations: $271 million for Q1 2025.
- Net Capital Expenditures: $98 million for Q1 2025.
- Total Backlog: $7.5 billion as of April 28, 2025, up 30% from the prior quarter.
- Revenue Guidance for 2025: $3.25 billion to $3.45 billion.
- Adjusted EBITDA Guidance for 2025: $1.05 billion to $1.15 billion.
- Capital Expenditures Guidance for 2025: $375 million to $425 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Noble Corp PLC (NE, Financial) reported strong financial results for Q1 2025, with an adjusted EBITDA of $338 million and free cash flow of $173 million.
- The company has successfully integrated the Legacy Diamond Fleet into Noble's ERP system ahead of schedule, aiming for $100 million in synergies by year-end.
- Noble Corp PLC (NE) secured long-term contracts with major oil companies, including Shell and Total Energies, adding nearly 14 rig years to its backlog with a revenue potential between $2.0 billion and $2.5 billion.
- The company's backlog increased by 30% from the previous quarter, reaching $7.5 billion, indicating strong future revenue potential.
- Noble Corp PLC (NE) continues to return capital to shareholders, surpassing $1 billion in combined dividends and buybacks since Q4 2022, and declared a $0.50 per share dividend for Q2 2025.
Negative Points
- The offshore drilling market remains volatile, with Noble Corp PLC (NE) noting a choppy spot market for deepwater and jackups through 2025 and into 2026.
- The company anticipates softer utilization across its jackup fleet in 2025 compared to 2024, due to headwinds from Saudi suspensions and day rate concessions.
- Noble Corp PLC (NE) expects the Ocean GreatWhite rig to be idled for the remainder of the year, highlighting challenges in securing contracts for certain assets.
- Inflationary pressures are expected to impact operating costs, with low to mid-single-digit increases anticipated throughout the year.
- The company faces potential cost impacts from tariffs, estimating less than a $15 million effect in 2025, but acknowledging the situation is fluid and could change.
