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On Wednesday, Citi analyst Scott Gruber revised the price target for NOV Inc. (NYSE: NOV), a leading provider of technology and equipment to the global energy industry, to $13.00 from the previous $17.00, while maintaining a Neutral rating on the stock. The adjustment follows NOV’s earnings call where the company provided updates on tariffs and its outlook for the second half of 2025. This revision aligns with broader analyst sentiment, as InvestingPro data shows five analysts have recently lowered their earnings forecasts for the upcoming period. The stock has declined about 34% over the past year, currently trading at $11.74.
During the earnings call, NOV indicated an expected revenue increase of 3-5% in its Wellbore Technologies segment for the latter half of the year, attributing this to product deliveries scheduled for year-end. This projection was made despite the segment’s sensitivity to fluctuating rig counts. In contrast, the Completion & Production Solutions segment is anticipated to remain flat during the same period, even with a substantial backlog. This is due to weaker North American equipment sales.
Citi’s analysis suggests that the Completion & Production Solutions segment might perform slightly better than NOV’s guidance, while the Wellbore Technologies segment could underperform. However, when these forecasts are consolidated, the overall impact is expected to be negligible. Consequently, Citi has trimmed its second-quarter EBITDA estimate for NOV to $266 million and reduced the full-year 2025 EBITDA forecast by 9% to $1.04 billion.
The firm also adjusted its EBITDA prediction for 2026, cutting it by 19% to $1.01 billion, signaling a modest year-over-year decline. This outlook takes into account a weaker U.S. market activity and an anticipated drop in equipment orders for the Completion & Production Solutions segment, with inbound orders estimated to be around $2 billion for 2025, a decrease of roughly 25% from the previous year.
Despite the lowered EBITDA forecasts, the current stock price seems to factor in an even more significant EBITDA reduction, trading at approximately 4.6 times the EBITDA multiple. Gruber notes that while the stock is currently priced for a steeper decline in earnings before interest, taxes, depreciation, and amortization, the potential for further negative revisions justifies a cautious stance, leading to the decision to maintain a neutral rating on NOV shares. According to InvestingPro analysis, NOV appears undervalued at current levels, with a price-to-book ratio of just 0.68 and a P/E ratio of 7.72. The company has maintained dividend payments for 17 consecutive years, demonstrating consistent shareholder returns despite market volatility. Get access to the comprehensive Pro Research Report and additional financial insights for NOV and 1,400+ other stocks through InvestingPro.
In other recent news, NOV Inc. reported its first-quarter 2025 financial results, revealing earnings per share (EPS) of $0.19, which fell short of analysts’ expectations of $0.25. The company achieved revenue of $2.1 billion, aligning with forecasts, and maintained a trend of improving EBITDA margins for the 14th consecutive quarter. However, the global decline in drilling activity, particularly in North America, poses challenges for NOV, as it anticipates a modest growth of 1-2% in the latter half of 2025. NOV also secured $437 million in orders for energy equipment in the first quarter of 2025, with positive developments in offshore deepwater trends. Meanwhile, JPMorgan revised its price target for NOV shares to $17.00 from $20.00, maintaining a Neutral rating, following a cautious second-quarter outlook and lowered full-year guidance. NOV’s management has indicated that about $40 million of tariff-related headwinds are factored into the full-year guidance, impacting costs. Despite these challenges, the company continues to focus on operational efficiencies and strategic sourcing to mitigate cost increases.
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