I am currently an NE long and have been so, for a number of years. During that time, I've been thoroughly disappointed with NE's pps/growth/profit/dividend performance. Below is an excerpt from an article in which FBR Capital thinks that NE is a good buy at these levels, with a possible dramatic increase in both pps and dividend payouts. They may have a point, all the bad news has been factored into the current pps and there may be no way for the stock to go, but up. Again, I remain optimistic, but I'll believe it when I see it.
Noble Corp. Pullback Viewed as Buying Opportunity
By Deann Marin | More Articles
January 25, 2013
Noble Corp. (NYSE:NE): Current price $37.17
FBR Capital views the 6% pullback in shares of Noble Corp. as a buying opportunity. The firm believes Noble Corp.’s disappointing results and cost guidance are now priced into shares and continues to expect a quadrupling of the dividend by 2014. They keep an Outperform rating on the stock with a $48 price target. Note Noble Corp. shares were downgraded this morning at Jefferies.
Yeah, Jeffries was pretty darned negative:
"We downgrade NE to Hold from Buy as we lower our PT to $41 from $44 and 2013/2014E EPS to $3.05/$4.25 from $3.80/$4.90. NE's disappointments on opex and capex guidance don't completely overwhelm the excitement we have for its long term earnings growth potential, but given share appreciation and near term risks (still), we prefer to be on the sidelines with this stock.”
Both of those cuts to EPS projections are huge.
If they are even close to right, NE will be in for a period of estimates being revised down, which is usually a pretty unproductive time to be long. I'm not sure why/how they can look at the last quarter's results and say that '14 EPS will be off by 20%, that seems a little speculative on their part.
I'm just a spectator for the moment, no positions.