Street Calls of the Week
Investing.com - Barclays has upgraded Helmerich & Payne (NYSE:HP) from Equalweight to Overweight and raised its price target to $25.00 from $17.00, citing expectations that the worst challenges for the drilling company are now behind it.
The land drilling company, which operates 141 active rigs in the Lower 48 states and 62 internationally, has seen its stock decline 36% year-to-date and 50% since announcing the KCA Deutag acquisition in July 2023, a deal that closed in January. Despite recent challenges, InvestingPro data shows the company maintains strong liquidity with a current ratio of 1.84, while revenue grew nearly 26% in the last twelve months.
Barclays believes the U.S. onshore rig count is approaching or has reached its trough, projecting a steady rebound in Helmerich & Payne’s active rig count in fiscal year 2026 from current levels, resulting in a relatively flat trajectory next year compared to fiscal 2025.
On the international front, the firm notes that while the KCA Deutag acquisition has been disappointing with 27 of 36 active rigs in Saudi Arabia suspended, these suspensions appear to be in the rearview mirror with potential for at least 10 suspensions to be lifted next year.
The analyst highlighted a recent tender from Saudi Aramco for 33 gas rigs in the Jafurah basin, noting that 16 of Helmerich & Payne’s 27 suspended rigs are capable of drilling for gas, which could represent upside to Barclays’ fiscal 2026 estimates.
In other recent news, Helmerich & Payne reported strong financial results for the third quarter of 2025. The company exceeded earnings expectations with an earnings per share (EPS) of $0.22, compared to the forecast of $0.18, marking a 22.22% surprise. Revenue also surpassed projections, reaching $1.04 billion against the anticipated $1.01 billion. Additionally, TD Cowen raised its price target for Helmerich & Payne to $27.00 from $26.00 while maintaining a Hold rating. The firm highlighted the company’s resilient North American Solutions margins and early signs of stabilization in international markets. Helmerich & Payne’s offshore operations also contributed steadily to its performance. These developments reflect recent positive momentum for the company.
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