Citi keeps neutral rating on Helmerich & Payne with $48 target

Citi analyst Scott Gruber reiterated a Neutral rating and $48.00 price target on Helmerich & Payne (NYSE: HP), whose shares last closed at $40.19.

The rating follows Citi's attendance at HP's Technology Day, where the company announced contracts with ExxonMobil to add seven FlexRobotics packages to its operations in the Midland basin, expanding from two currently deployed units.

Gruber described FlexRobotics as "Tier 2 automation," building on the company's existing "Tier 1 automation" led by an automated floor wrench for pipe connections. According to the analyst, the automation initiative, combined with Helmerich & Payne's drilling software, is contributing to its position as a preferred rig supplier.

The analyst also noted that Helmerich & Payne outlined a strategy to expand its technology portfolio across its global operations following the KCA acquisition. Gruber said this initiative is aimed at closing a margin gap of more than $10,000 per day between the company's U.S. and international land operations, with the company targeting approximately 1x leverage within roughly one year.

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