Citi analyst Scott Gruber maintained a Hold rating on NOV (NOV – Research Report) yesterday and set a price target of $13.00.
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Scott Gruber has given his Hold rating due to a combination of factors impacting NOV’s financial outlook. The company is expected to experience a normal seasonal recovery, but there is caution regarding the second half of the year. Specifically, revenue in the EP&S segment is anticipated to decline, contrary to the company’s guidance of an increase. This discrepancy is influenced by factors such as tariffs, geopolitical issues, and crude price volatility, which could affect the book-to-bill ratio.
Despite these challenges, NOV’s free cash flow (FCF) conversion is projected to be robust, potentially surpassing 50% this year and reaching approximately 60%, which is higher than consensus estimates. However, the EBITDA forecast for the full year and beyond is slightly below consensus, with expectations of a decline by 2026. Given these mixed signals, Gruber maintains a target price of $13, reflecting a modest expected share price return, and thus supports a Hold rating.