TD Cowen reiterates buy rating on NOV stock amid offshore potential

TD Cowen maintained its buy rating and $17.00 price target on NOV Inc. (NYSE:NOV) Monday, citing the company’s long-term positioning to benefit from increased offshore spending. Currently trading at $13.56, InvestingPro analysis suggests the stock is trading below its Fair Value, with a P/E ratio of 9x.

The research firm identified NOV as one of only two buy-rated small and mid-cap stocks in its coverage universe, and the only one in the oilfield services sector. TD Cowen acknowledged that while NOV faces some near-term fundamental challenges, it believes the current valuation already reflects these concerns. InvestingPro data shows the company maintains strong fundamentals with a "GREAT" financial health score, operating with moderate debt levels and liquid assets exceeding short-term obligations.

The $17 price target is based on a discounted cash flow analysis that incorporates what TD Cowen described as "an arguably conservative 10.75% weighted average cost of capital." This target represents approximately 8.9 times the firm’s estimated 2026 EBITDA for NOV.

TD Cowen highlighted NOV’s potential to improve margins as another factor supporting its positive outlook on the stock. The firm’s analysis suggests that despite current headwinds, NOV has operational room to enhance profitability.

NOV Inc., which provides equipment and technology to the global oil and gas industry, remains positioned to capitalize on what TD Cowen expects will be increased capital expenditures in offshore drilling projects over the longer term. The company has demonstrated financial stability with 17 consecutive years of dividend payments and maintains profitability, according to InvestingPro data, which offers additional insights through its comprehensive Pro Research Report.

In other recent news, NOV Inc. reported its first-quarter 2025 financial results, showing revenue of $2.1 billion, which aligned with expectations. However, earnings per share (EPS) fell short, coming in at $0.19 against a forecast of $0.25. Citi and JPMorgan have both adjusted their price targets for NOV, with Citi lowering its target to $13 and JPMorgan to $17, both maintaining a Neutral rating. Citi’s analysis suggests potential underperformance in NOV’s Wellbore Technologies segment, while the Completion & Production Solutions segment might slightly outperform NOV’s guidance. NOV anticipates a second-quarter EBITDA of $265 million, which is below both JPMorgan’s estimate of $278 million and the broader market estimate of $274 million. The company faces challenges from tariff-related costs, which are expected to impact full-year guidance. Despite these hurdles, NOV secured $437 million in orders for energy equipment in the first quarter and highlighted potential revenue contributions from offshore projects. The company’s management remains cautious about future orders, forecasting a book-to-bill ratio of 0.92 times for fiscal year 2025.

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