Nabors Industries (NBR) provides advanced technology to the energy industry. With a global presence, its core competencies include drilling, engineering, automation, data science, and manufacturing.
Let’s take a look at Nabors’ latest financial performance, corporate updates, and newly added risk factor. (See Nabors Industries stock charts on TipRanks).
Q2 Financial Results
Nabors reported revenue of $489.27 million for Q2 2021. That was down from $535.97 million in the same quarter last year but beat the consensus estimate of $465.34 million.
The company posted a loss per share of $26.59 compared to a loss per share of $22.13 in the same quarter last year, and missed the consensus estimate of a loss per share of $17.46.
Corporate Updates
The company repaid the outstanding portion of its 4.625% senior notes at maturity on September 15. The outstanding amount as of June 30, 2021, totaled $82.4 million. “Our next pending maturity occurs in early 2023 and amounts to less than $25 million,” said Anthony Petrello, Nabors Chairman, CEO, and President.
Nabors has set up a special purpose acquisition company (SPAC) called Nabors Energy Transition (NETC). The SPAC is looking to raise $250 million through an initial public offering (IPO), which it intends to invest in the energy transition space. A select group of Nabors’ management team, including CEO Anthony G. Petrello, are leading the SPAC.
Risk Factors
The new TipRanks Risk Factors tool shows 45 risk factors for Nabors. Since Q4 2020, the company has updated its risk profile with one new risk factor under the Finance and Corporate category.
Nabors tells investors that the NETC SPAC IPO plan subjects it to many uncertainties, including the increasing regulatory scrutiny of SPACs. Therefore, there may be delays and additional costs in the SPAC IPO process. Moreover, NETC may not be able to complete a suitable merger within the two years required to close such SPAC transactions. Nabors warns that its stock price, operating results, and financial condition may be adversely impacted as a result of the challenges related to the NETC SPAC.
The majority of Nabors’ risk factors fall under the Finance and Corporate category, with 29% of the total risks. That is below the sector average of 39%. Nabors’ shares have gained about 86% since the beginning of 2021.
Analysts’ Take
In July, Susquehanna analyst Charles Minervino reiterated a Hold rating on Nabors stock but lowered the price target to $100 from $124. Minervino’s new price target suggests 7.73% downside potential.
Consensus among analysts is a Hold based on 3 Holds and 1 Sell. The average Nabors Industries price target of $100.25 implies 7.50% downside potential from current levels.
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