Impact Of Slower US Land Rig Growth On Helmerich & Payne, Analyst Downgrades Stock
Portfolio Pulse from Lekha Gupta
RBC Capital Markets analyst Keith Mackey has downgraded Helmerich & Payne Inc (NYSE:HP) to 'Sector Perform' from 'Outperform' and reduced the price target to $45 from $53. The downgrade is due to a reduced forecast for the U.S. land rig count, which impacts HP's growth and margin expansion. The majority of HP's earnings come from U.S. onshore land rigs. The analyst expects EBITDA margins to peak at 32.8% in 2023 and decline by around 110bps in 2024.
July 10, 2023 | 6:20 pm
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Helmerich & Payne Inc's stock has been downgraded by RBC Capital Markets due to a reduced forecast for the U.S. land rig count. This is expected to impact HP's growth and margin expansion, with EBITDA margins predicted to peak in 2023 and decline in 2024.
The downgrade of Helmerich & Payne Inc's stock by RBC Capital Markets is due to a reduced forecast for the U.S. land rig count. As the majority of HP's earnings come from U.S. onshore land rigs, this reduced forecast is expected to impact HP's growth and margin expansion. The analyst predicts that EBITDA margins will peak at 32.8% in 2023 and then decline by around 110bps in 2024. This negative outlook is likely to put downward pressure on HP's stock price in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100