Fed Governor Adriana Kugler to resign
On Wednesday, JPMorgan adjusted its outlook on Noble Corporation (NYSE:NE) by reducing the price target from $31.00 to $30.00, while keeping a Neutral rating on the stock. Currently trading at $22.47, the stock has shown resilience with a 12.6% gain over the past week, though it remains significantly below its 52-week high of $48.74. InvestingPro analysis suggests the stock is currently undervalued, with analysts setting targets ranging from $22 to $40. The firm’s analysis highlighted Noble Corporation’s ongoing customer engagement for deepwater drilling projects slated for 2026-2027, despite current market volatility and the potential impact of tariffs.
Noble Corporation has recently reported a substantial increase in its contract backlog, which has grown by 29% to $7.5 billion over the last 70 days. This surge is attributed to new contract activity, with the company securing additional work estimated to bring in between $2.2 billion and $2.7 billion, depending on the achievement of performance bonuses. The company’s strong operational performance is reflected in its impressive 25.6% revenue growth and "GREAT" financial health score according to InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ US stocks. Notably, the majority of these gains were realized following the company’s April 2nd Liberation Day announcement.
The contracts include two four-year agreements with Shell for the Noble Voyager and another seventh-generation drillship, with operations expected to commence in mid-2026 and the fourth quarter of 2027, respectively. The base dayrate for these contracts is set at $415,000, which is below JPMorgan’s estimate of $467,000 per day. However, with performance bonuses, the revenue could potentially reach approximately $448,000 per day if Noble Corporation achieves 40% of the available bonus.
The Shell contracts also involve significant upgrades to the Noble Corporation’s rigs, totaling $65 million per rig. These enhancements are designed to increase the hookload capacity of the derricks, incorporate a controlled mud-line system, install new cranes, and update the power systems. With a healthy current ratio of 1.57 and an attractive P/E ratio of 7.59, the company appears well-positioned to handle these investments. The cost of these upgrades, when amortized over the contract term, is expected to be around $45,000 per day. Investors should note that Noble’s next earnings report is scheduled for May 6, which could provide further insights into these developments.
JPMorgan’s report suggests that the new contracts awarded to Noble Corporation could result in the displacement of Transocean (NYSE:RIG)’s Proteus and Pontus drillships, which are currently under contract with Shell in the U.S. Gulf. The financial implications of these developments are reflected in the revised price target for Noble Corporation’s stock.
In other recent news, Noble Corp reported its Q1 2025 earnings, revealing a mixed performance with a revenue beat and an earnings per share (EPS) miss. The company reported revenue of $874 million, surpassing the forecast of $860.57 million, while EPS fell short at $0.26 compared to the anticipated $0.36. Noble’s total backlog increased by 30% to €7.5 billion, and the integration with Diamond Offshore is on track, achieving €70 million in synergies. The company also announced long-term contracts with Shell and Total (EPA:TTEF) Energy, with potential revenue between $2 billion and $2.5 billion, and $753 million, respectively. Analysts from firms like Pickering Energy Partners and JPMorgan discussed the strategic nature of Noble’s contracts and the company’s focus on performance-based incentives. Additionally, Noble has set full-year revenue guidance between €3.25 billion and €3.45 billion, with adjusted EBITDA guidance of €1.05 billion to €1.15 billion. Despite the EPS miss, Noble’s operational achievements and strategic contracts have reassured investors about its future growth prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.