Noble Corporation plc NE is well poised for growth, backed by secured commitments and a robust portfolio of assets. London-based Noble Corp. is a provider of diversified services for the oil and gas industry. The company offers services principally in the U.S. Gulf of Mexico, Canada, East Asia, the Middle East, the North Sea, Oceania, the Black Sea and South America.
Let’s delve deeper into the factors that substantiate its Zacks Rank #2 (Buy).
Noble Corp. is a leading offshore drilling firm with a robust portfolio of assets. Though the industry has witnessed a setback in the past few months, the company is likely to be less impacted by the same than its peers. This is because Noble Corp. enjoys a strong backlog position ($2.3 billion).
For 2019, about 62% of the available rig days are committed, which include 49% and 75% of floating and jackup rig days, respectively. These secured commitments act as a cushion for the company in the volatile pricing market.
Noble Corp. expects 2019 capital expenditure to be $303.9 million, indicating 8% rise from the prior year. This higher spending would further help the company to continue with endeavours to upgrade its fleet through acquisitions and newbuild projects. In this respect, it is noteworthy to mention that Noble Corp. exercized the option to purchase a new jackup rig, which is known as the Noble Joe Knight effective Feb 14, 2019.
Impressive Industry Outlook:
The industry, to which Noble Corp. belongs to, currently has a Zacks Industry Rank of 62 out of 255 (top 24%). Studies have shown that 50% of a stock's price movement is directly tied to the performance of the industry group, of which it is part of. In fact, an average stock in a strong group is likely to outperform a great stock in a poor industry. Therefore, taking industry performance into account becomes a necessary measure.
Northward Estimate Revisions: Four estimates for 2019 have moved north in the past 60 days versus no downward revision, which reflects analysts’ confidence in the company. The Zacks Consensus Estimate for 2019 has moved up 2% over the same period.
Positive Earnings Surprise History: Noble Corp. has an impressive earnings surprise history. The company outpaced the consensus mark in three of the trailing four quarters, delivering a positive average earnings surprise of 6.5%.
Noble Corporation Price and EPS Surprise
Noble Corporation price-eps-surprise | Noble Corporation Quote
Other Key Picks
Other top-ranked players in the energy space include Approach Resources Inc. AREX, Independence Contract Drilling, Inc. ICD and Cheniere Energy, Inc. LNG. While Approach Resources sports a Zacks Rank #1 (Strong Buy), Independence Contract Drilling and Cheniere have a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Approach Resources beat earnings estimates thrice in the trailing four quarters, with positive surprise of 12.7%.