TD Cowen analyst Marc Bianchi maintained a Buy rating on NOV today and set a price target of $19.00.
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Marc Bianchi has given his Buy rating due to a combination of factors that highlight NOV’s potential for growth and stability. The company has shown a strong performance by outperforming the OIH index, driven by an EBITDA beat, solid free cash flow, and robust orders. Notably, NOV’s guidance for the fourth quarter aligns with consensus expectations, marking a shift from previous quarters where guidance fell below consensus, indicating stabilization in their business.
Additionally, NOV’s third-quarter revenue and EBITDA exceeded consensus estimates, and management’s commentary suggests a positive outlook with expectations of approximately $1 billion in EBITDA for 2025. The strong energy equipment orders and a favorable book-to-bill ratio further support the potential for future growth. The company’s efforts to manage working capital and the expectation of a 55% EBITDA to free cash flow conversion for the year also contribute to the positive outlook. Consequently, the price target has been raised from $17 to $19, reflecting an improved valuation based on a more steady progression in revenue and a 10% weighted average cost of capital.
In another report released today, Stifel Nicolaus also maintained a Buy rating on the stock with a $17.00 price target.