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Friday, September 07, 2012 3:20:10 PM
By Zacks Equity Research |
http://finance.yahoo.com/news/nabors-lowered-underperform-222431115.html
Based upon the number of near-term challenges, we have lowered our recommendation on onshore contract driller Nabors Industries Ltd. (NBR) to Underperform from Neutral.
Barbados-based Nabors conducts oil, gas and geothermal land drilling operations and is the largest land-drilling contractor in the world. It is also one of the largest land well servicing companies and workover contractors in the U.S. The company offers a number of ancillary wellsite services, including oilfield management, engineering, transportation, construction, maintenance, well logging, and other support services in select domestic and international markets.
We are concerned about the weakness in Nabors’ pressure pumping business. Deterioration in pricing and utilization, coupled with the spike in costs, is likely to adversely impact the company’s second half results. The depressed North American onshore rig count has also been a negative.
As usual, we remain worried about weak natural gas fundamentals, which are likely to limit the company’s ability to generate positive earnings surprises. The glut in domestic gas supplies still exists, with storage levels remaining well above their benchmark levels.
This will continue to weigh on natural gas prices in the near-to-medium term. Nabors – the largest North American land drilling contractor ahead of Patterson-UTI Energy Inc. (PTEN) – remains particularly exposed to this situation since its business in the region is heavily biased to gas drilling.
Nabors’ relatively weak balance sheet in this severe credit-constrained environment (debt-to-capitalization ratio of approximately 45%) is also a cause for concern. Over the last few years, the company kept adding debt to its balance sheet for a fleet recapitalization program.
Considering these factors, we see Nabors as a risky bet from which ordinary investors should exit. Our new long-term Underperform recommendation is supported by a Zacks #5 Rank (short-term Strong Sell rating).
(Let's say I was ordinary? What then? ;)
What if there were no hypothetical questions?
Recent NBR News
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 07/26/2024 02:05:56 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/23/2024 08:10:15 PM
- Nabors Announces Second Quarter 2024 Results • PR Newswire (US) • 07/23/2024 08:05:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/22/2024 08:05:27 PM
- Nabors Prices $550 Million Senior Guaranteed Notes Offering • PR Newswire (US) • 07/18/2024 12:32:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/17/2024 01:14:10 PM
- Nabors Announces Offering of Senior Guaranteed Notes • PR Newswire (US) • 07/17/2024 12:57:00 PM
- Nabors Announces Preliminary Operating Results for the Quarter Ended June 30, 2024 • PR Newswire (US) • 07/17/2024 12:51:00 PM
- Form S-8 - Securities to be offered to employees in employee benefit plans • Edgar (US Regulatory) • 07/15/2024 09:20:59 PM
- Nabors Industries Ltd. 2nd Quarter 2024 Earnings Conference Call Invitation • PR Newswire (US) • 06/26/2024 08:15:00 PM
- Nabors Announces Second Quarter 2024 Update • PR Newswire (US) • 06/20/2024 08:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/17/2024 08:30:49 PM
- Nabors Announces Amendment and Restatement of $475 Million Credit Facility • PR Newswire (US) • 06/17/2024 08:15:00 PM
- Vista and Nabors to Deploy Third Drilling Rig to Vaca Muerta, Argentina • PR Newswire (US) • 05/06/2024 09:00:00 PM
- Nabors Announces First Quarter 2024 Results • PR Newswire (US) • 04/24/2024 08:15:00 PM
- Nabors Industries Ltd. 1st Quarter 2024 Earnings Conference Call Invitation • PR Newswire (US) • 04/03/2024 08:15:00 PM
- Form PRER14A - Preliminary Proxy Soliciting materials • Edgar (US Regulatory) • 03/07/2024 10:05:05 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/21/2024 09:20:54 PM
- Form 5 - Annual statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/13/2024 11:42:25 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 02/12/2024 08:18:23 PM
- Form PRE 14A - Other preliminary proxy statements • Edgar (US Regulatory) • 02/09/2024 09:57:05 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/06/2024 10:14:25 PM
- Nabors Announces Fourth Quarter 2023 Results • PR Newswire (US) • 02/06/2024 09:15:00 PM
- SLB und Nabors geben Zusammenarbeit bekannt, um die Einführung von Automatisierungslösungen für Bohranlagen auszuweiten • Business Wire • 01/11/2024 08:22:00 PM
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