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Noble Corporation (NE)
NYSE:NE
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Noble Corporation
(NYSE:NE)
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Rating:72Outperform
Price Target:
$39.00
▲(9.49% Upside)
Noble Corporation's overall stock score reflects a stable financial performance with some challenges, strong technical indicators suggesting bullish momentum, and a positive earnings call highlighting strategic growth and operational excellence. The valuation is slightly high, but the attractive dividend yield provides a compensating factor.
Positive Factors
Backlog & Contract Wins
A $7B backlog provides multi‑quarter revenue visibility and reduces short‑term cyclicality in dayrate markets. Large multi‑year awards and extensions for high‑spec rigs underpin utilization recovery plans and support planned capital allocation and fleet reactivation timing.
Balance Sheet Resilience
A moderate debt load and a ~59% equity base give financial flexibility to absorb offshore industry volatility. Manageable leverage supports funding of reactivation capex, tendering for multi‑year contracts, and maintaining dividend/distribution capacity without immediate refinancing risk.
Operational Cash Generation
Quarterly free cash flow and solid adjusted EBITDA show the business can convert operations into cash even through cycles. That cash funded $340M of 2025 shareholder returns and capex, evidencing a durable ability to support returns while investing in fleet readiness.
Negative Factors
Margin Compression
A halving of net margin signals weaker pricing power or rising operating costs; persistent margin erosion reduces retained earnings, lowers ROE, and constrains reinvestment capacity. In capital‑intensive drilling, sustained margin pressure can lengthen recovery and amplify downside in low dayrate periods.
Weak FCF Conversion
Declining free cash flow growth and sub‑50% conversion indicate limited cash cushion relative to reported profits. Over time this hampers ability to fund reactivations and large mobilization capex without external financing, increasing sensitivity to higher rates or credit constraints.
Contract Price Sensitivity & Idle Capacity
Structural price sensitivity and expected idle rig periods signal continued weak bargaining leverage with operators. Extended idle capacity delays utilization recovery, pressures dayrates and backlog realization, and can force concessionary contract terms that depress long‑term margin sustainability.
Noble Corporation (NE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.66B
Dividend Yield8.85%
Average Volume (3M)1.57M
Price to Earnings (P/E)25.5
Beta (1Y)1.40
Revenue Growth24.34%
EPS Growth-59.48%
CountryUS
Employees5,000
SectorEnergy
Sector Strength52
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)0.19
Shares Outstanding158,846,730
10 Day Avg. Volume1,903,573
30 Day Avg. Volume1,567,752
Financial Highlights & Ratios
PEG Ratio-0.77
Price to Book (P/B)1.00
Price to Sales (P/S)1.53
P/FCF Ratio58.26
Enterprise Value/Market Cap1.26
Enterprise Value/Revenue2.08
Enterprise Value/Gross Profit8.87
Enterprise Value/Ebitda6.38
Forecast
1Y Price Target
$33.20Price Target Upside-6.79% Downside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Noble Corporation Business Overview & Revenue Model
Company DescriptionNoble Corporation, together with its subsidiaries, operates as an offshore drilling contractor for the oil and gas industry worldwide. The company provides contract drilling services to the oil and gas industry through its fleet of mobile offshore drilling units. As of February 16, 2022, it operated a fleet of 20 offshore drilling units, which included 12 floaters and 8 jackups. The company was formerly known as Noble Holding Corporation plc. Noble Corporation was founded in 1921 and is headquartered in Sugar Land, Texas.
How the Company Makes MoneyNoble Corporation generates revenue primarily through day rates charged for the use of its drilling rigs and related services. The company enters into contracts with oil and gas companies for the leasing of its drilling units, which can range from short-term contracts to long-term agreements spanning several years. Key revenue streams include the utilization of its high-specification offshore rigs, which are in demand due to the ongoing exploration activities in deepwater regions. Additionally, Noble may also earn revenue from providing supplemental services, such as crew training and equipment maintenance. Significant partnerships with major oil producers enhance its revenue potential, as these collaborations often lead to multi-year contracts that ensure steady cash flow. Market dynamics, including oil prices and demand for offshore drilling capabilities, also play a crucial role in influencing the company's earnings.
Noble Corporation Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Neutral
Noble Corporation reported strong financial performance and successful integration efforts but faced challenges with near-term market softness and reduced revenue guidance. Despite these challenges, the company has a positive outlook for future demand in key regions.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Noble Corporation reported strong financial results with adjusted EBITDA of $282 million and free cash flow of $107 million for Q2 2025.
Shareholder Returns
Returned $80 million to shareholders through a $0.50 per share quarterly dividend, with a total capital return of over $1.1 billion since Q4 2022.
Successful Integration
Achieved $100 million synergy target from the Diamond acquisition ahead of schedule.
New Contracts and Backlog
Secured six new contracts and increased total backlog to $6.9 billion, with $2.8 billion in new contract value year-to-date.
Positive Market Outlook
Continued strength in South America, with potential for a rebound in West Africa and promising deepwater demand projected for late 2026 and 2027.
Negative Updates
Near-Term Market Softness
Pressure on day rates and near-term gaps in rig contracts due to macroeconomic uncertainties and softening demand in certain regions.
Reduced Revenue Guidance
Lowered full-year 2025 revenue guidance to $3.2 billion to $3.3 billion due to softer spot market and unexercised options.
Idle and Disposed Rigs
Several rigs are idle or being disposed of, including the Noble Globetrotter II and Noble Highlander, highlighting surplus cost burdens.
Soft North Sea Market
Muted market conditions in the North Sea and Norway, with fiscal and regulatory headwinds affecting jackup demand.
Company Guidance
During Noble Corporation's second quarter 2025 earnings call, the company provided updated guidance for the fiscal year, highlighting several financial metrics and strategic initiatives. The company reported strong financial results with an adjusted EBITDA of $282 million and free cash flow of $107 million for Q2. Despite lowering its total revenue guidance for 2025 to a range of $3.2 billion to $3.3 billion, the company narrowed its adjusted EBITDA guidance to the upper end of its previous range, now set at $1.075 billion to $1.15 billion, driven by effective cost management. The company also emphasized its ongoing commitment to returning capital to shareholders, having returned $80 million through a $0.50 per share quarterly dividend, with a cumulative capital return exceeding $1.1 billion since Q4 2022. Noble achieved its $100 million synergy target from the Diamond acquisition ahead of schedule, focusing now on optimization. The company secured new contracts worth a total contract value of $2.8 billion year-to-date, contributing to a total backlog of $6.9 billion as of August 5. Looking ahead, Noble Corporation anticipates a sequential decline in adjusted EBITDA in Q3 due to contract rollovers and planned downtime but remains constructive on the long-term market, expecting a significant rebound starting in the second half of 2026.Noble Corporation Financial Statement Overview
Summary
Noble Corporation's financial performance is stable but faces challenges. The income statement shows operational efficiency with decent margins, but declining profitability. The balance sheet is stable with manageable debt, though profitability from equity is decreasing. Cash flow metrics indicate challenges in free cash flow growth, but cash generation remains adequate.Income Statement
Noble Corporation's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate by 7.3%, which is concerning. However, the company maintains a decent gross profit margin of 23.4% and an EBIT margin of 15.8%, indicating operational efficiency. The net profit margin has decreased to 6.6% from 14.7% in the previous year, reflecting reduced profitability.70
Positive
Balance Sheet
The balance sheet reveals a moderate financial position. The debt-to-equity ratio is 0.44, indicating a manageable level of debt relative to equity. Return on equity has decreased to 4.9%, suggesting lower profitability from shareholders' equity. The equity ratio stands at 59.3%, which is stable, showing a solid equity base.65
Positive
Cash Flow
Cash flow analysis shows challenges with a negative free cash flow growth rate of -4.2% in the TTM. The operating cash flow to net income ratio is 1.16, indicating adequate cash generation relative to net income. However, the free cash flow to net income ratio of 0.44 suggests limited free cash flow relative to profits.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.45B | 3.06B | 2.59B | 1.41B | 847.81M | 964.27M |
| Gross Profit | 807.24M | 836.55M | 743.75M | 305.44M | -7.33M | -25.53M |
| EBITDA | 1.12B | 1.02B | 765.95M | 381.10M | 34.63M | -3.70B |
| Net Income | 226.73M | 448.35M | 481.90M | 168.95M | 352.21M | -3.98B |
Balance Sheet | ||||||
| Total Assets | 7.64B | 7.96B | 5.51B | 5.23B | 2.07B | 4.26B |
| Cash, Cash Equivalents and Short-Term Investments | 477.95M | 247.30M | 360.79M | 476.21M | 194.14M | 365.03M |
| Total Debt | 1.98B | 2.08B | 611.87M | 672.77M | 233.09M | 6.91M |
| Total Liabilities | 3.11B | 3.31B | 1.59B | 1.63B | 572.82M | 4.58B |
| Stockholders Equity | 4.53B | 4.65B | 3.92B | 3.61B | 1.50B | -311.39M |
Cash Flow | ||||||
| Free Cash Flow | 392.33M | 80.16M | 164.76M | 106.67M | -162.87M | 124.31M |
| Operating Cash Flow | 900.77M | 655.48M | 574.34M | 280.99M | 6.17M | 273.20M |
| Investing Cash Flow | -388.90M | -959.02M | -366.51M | 375.77M | 193.45M | -121.52M |
| Financing Cash Flow | -432.45M | 188.08M | -325.79M | -367.77M | -367.94M | 107.44M |
Noble Corporation Technical Analysis
Positive
35.62
Price Trends
30.86
Positive
29.85
Positive
27.55
Positive
Market Momentum
1.56
Negative
70.29
Negative
74.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NE, the sentiment is Positive. The current price of 35.62 is above the 20-day moving average (MA) of 32.40, above the 50-day MA of 30.86, and above the 200-day MA of 27.55, indicating a bullish trend. The MACD of 1.56 indicates Negative momentum. The RSI at 70.29 is Negative, neither overbought nor oversold. The STOCH value of 74.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NE.
Noble Corporation Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $4.02B | 10.29 | 17.49% | ― | 6.81% | -61.94% | |
73 Outperform | $3.44B | -20.37 | -5.87% | 3.24% | 35.89% | -148.39% | |
72 Outperform | $5.66B | 25.53 | 4.92% | 8.85% | 24.34% | -59.48% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | $2.39B | 77.05 | 1.18% | ― | -9.31% | -91.57% | |
58 Neutral | $2.86B | -21.36 | -4.00% | 5.42% | -16.59% | 83.95% | |
57 Neutral | $5.47B | -1.52 | -32.05% | ― | 16.93% | -335.82% |
* Energy Sector Average
NE
Noble Corporation
35.62
6.41
21.93%
HP
Helmerich & Payne
33.88
4.07
13.64%
PTEN
Patterson-UTI
7.53
0.05
0.67%
RIG
Transocean
4.97
1.18
31.13%
VAL
Valaris
57.73
11.48
24.82%
SDRL
Seadrill Limited
38.48
3.36
9.57%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.