Price Target Increase#
TD Cowen has raised its price target for NOV Inc. (NYSE:NOV) from $23.00 to $25.00 while maintaining a Buy rating on the stock. Over the past year, NOV has shown impressive performance with a 72% return, currently trading at $20.29, close to its 52-week high of $20.93.
Quarterly Performance#
The firm noted that NOV's first-quarter results matched expectations, and the second-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) midpoint exceeded consensus forecasts by 2%. Excluding impacts from the Middle East, the second-quarter performance aligns with pre-conflict predictions. Management anticipates a book-to-bill ratio of nearly one by 2026, indicating a healthy order flow relative to sales.
Positive Offshore Outlook#
TD Cowen highlighted a growing positive sentiment in the offshore sector, with NOV's subsea backlog extending into 2028. There is also continued momentum in floating production storage and offloading investments, suggesting a robust future for the company in this area.
Mixed Market Conditions#
Despite these encouraging signs, NOV has underperformed compared to the Oil Services ETF (OIH) by about 305 basis points, according to TD Cowen. Additionally, NOV recently reported first-quarter 2026 earnings that fell short of market expectations, with earnings per share (EPS) at $0.05, significantly below the anticipated $0.16. Revenue also slightly missed estimates at $2.05 billion versus the expected $2.06 billion, impacted by increased logistics costs due to ongoing conflicts in the Middle East.
In response to these challenges, Evercore ISI adjusted its price target for NOV to $22 from $19, maintaining an In Line rating. They noted improving demand for capital equipment as a positive sign, assuming stability in the Middle East in the near term. These developments reflect a mixed outlook for NOV as it navigates both challenges and opportunities in its market.