JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Wednesday, JPMorgan adjusted its price target on NOV Inc. (NYSE: NOV) shares, reducing it to $17.00 from the previous $20.00, while maintaining a Neutral rating on the stock. The revision followed NOV’s first-quarter financial results, which surpassed expectations with strong free cash flow conversion, generating $953 million in the last twelve months. Trading at $12 per share, roughly 43% below its 52-week high of $21.20, the stock appears undervalued according to InvestingPro analysis. The stock experienced a 2% decline, underperforming the OSX, which saw a slight increase of 0.3%. The dip was attributed to a cautious second-quarter outlook and lowered full-year guidance that fell short of consensus estimates.[Want deeper insights? InvestingPro subscribers get access to 8 additional ProTips and comprehensive valuation metrics for NOV.]
NOV anticipates a second-quarter EBITDA of $265 million, a decrease from the JPMorgan estimate of $278 million and the Street estimate of $274 million. This expectation includes the impact of $8 million to $10 million in costs related to tariffs. The company’s guidance for the second half of the year suggests a full-year EBITDA of $1.04 billion, assuming revenues of $8.59 billion and EBITDA margins of approximately 12.2%. Despite the margin pressure, NOV maintains strong financial health with a current ratio of 2.65 and operates with moderate debt levels, as indicated by its debt-to-equity ratio of 0.4. This represents a slight year-over-year margin decline, contrasting with previous forecasts that projected an expansion of 50 to 150 basis points for the fiscal year 2025.
Management has indicated that about $40 million of tariff-related headwinds are factored into the full-year guidance, including an estimated $15 million per quarter in the latter half of the year. NOV has been proactive in addressing these challenges, drawing on its experience from navigating tariffs during President Trump’s first term and the subsequent pandemic. The company’s strategies have involved optimizing its manufacturing footprint across the U.S., Mexico, and Canada under the USMCA agreement, strategic sourcing of raw materials, and negotiating with vendors to mitigate cost increases.
Despite the softer outlook, NOV secured $437 million in orders for energy equipment in the first quarter of 2025. The company’s tone on future orders was more cautious, leading JPMorgan to forecast a book-to-bill ratio of 0.92 times for the fiscal year 2025, compared to 1.22 times in 2024. With analyst price targets ranging from $10 to $23 per share, NOV highlighted positive developments in offshore deepwater trends, noting 14 potential FPSO projects, with 12 possibly contributing to the 2025 revenue, and each project could bring in $100 million to $700 million depending on its size and scope.[Access the complete NOV analysis and 1,400+ other detailed Pro Research Reports with an InvestingPro subscription.]
In other recent news, Nov Inc. reported its first-quarter 2025 financial results, with earnings per share (EPS) of $0.19, falling short of analysts’ expectations of $0.25. Revenue, however, met projections at $2.1 billion. Despite the earnings miss, the company continued its trend of improving EBITDA margins for the 14th consecutive quarter. Nov Inc. repurchased 5.4 million shares, returning $81 million to shareholders, and paid $28 million in dividends. Looking ahead, the company anticipates a revenue decline of 1-4% for the second quarter of 2025, with EBITDA expected between $250 million and $280 million. Analysts from Raymond (NSE:RYMD) James and JPMorgan Securities noted the challenges in the North American market and potential opportunities in international and offshore sectors. The company remains cautious due to geopolitical and macroeconomic uncertainties, estimating tariff impacts of $8-10 million in the second quarter, potentially increasing to $15 million per quarter.
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