UPDATE: BofA Securities Upgrades NOV Inc. (NOV) to Buy

(Updated - September 30, 2022 9:02 AM EDT)

BofA Securities analyst Chase Mulvehill upgraded NOV Inc. (NYSE: NOV) from Neutral to Buy with a price target of $19.00.

The analyst comments "Since recent June highs, NOV is down 29%, which compares to capital equipment peer performance of: -24% CHX (ChampionX, flat FTI (TechnipFMC) and -29% WHD (Cactus). Shares have sold off amidst gusting macro headwinds, with 12-month Brent strip -25% over the same period. For NOV, its short-cycle businesses (Wellbore) are doing well and longer-cycle businesses (CAPS, Rig Tech) are set to benefit from higher customer (i.e., OFS (oil field services)) capex & equipment tightness in NAM and also Int’l and Offshore during ‘23. Note NOV delivered strong EBITDA beats in 1H22 and mgmt. has guided to 2H Adj. EBITDA 45-55% above the 1H level. As such, consensus 2H22 EBITDA has risen 18% QTD to $387mm. We see NOV continuing to benefit from rising OFS capex, better pricing/fixed cost absorption, easing supply chains, and better mix. Further, NOV is set to be net debt neutral by YE23, while we also see some of least downside to consensus estimates among peers should a recession occur. We increase our ’22/’23 EBITDA estimates 1%/3% to $640/$898mm, respectively. We reiterate our DCF-based $19 PO; upgrade our rating to Buy from Neutral."

For an analyst ratings summary and ratings history on NOV Inc. click here. For more ratings news on NOV Inc. click here.

Shares of NOV Inc. closed at $15.74 yesterday.

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