HP: Saudi Rig Reactivations Will Offset Margin Pressure And Support Shares

Analysts have raised their price target on Helmerich & Payne from approximately $24.00 to about $27.20, citing expectations for stronger top line growth and a higher future earnings multiple, even though projected profit margins are slightly lower.

What's in the News

• Notice received to recommence operations on seven suspended land rigs in Saudi Arabia, with staged reactivations planned through the first half of 2026 (Key Developments)
• Suspension days for each Saudi rig will be added to its remaining contract term, extending contracted backlog in the region (Key Developments)
• H&P expects to operate 24 rigs in Saudi Arabia by mid 2026, including eight proprietary FlexRigs and 16 rigs from the KCA Deutag acquisition, highlighting its growing Eastern Hemisphere footprint (Key Developments)
• Board meeting scheduled for September 9, 2025, to consider declaring a quarterly cash dividend of $0.25 per share, payable December 2, 2025, to shareholders of record on November 18, 2025 (Key Developments)

Valuation Changes

• The Fair Value estimate has risen moderately from approximately $24.00 to about $27.20, reflecting a higher intrinsic valuation per share.
• The Discount Rate has increased slightly from about 8.31 percent to roughly 8.40 percent, signaling a marginally higher required return.
• The Revenue Growth assumption has risen significantly from around 1.30 percent to roughly 3.30 percent, indicating stronger expected top line expansion.
• The Net Profit Margin forecast has fallen modestly from approximately 5.56 percent to about 4.90 percent, implying slightly lower profitability expectations.
• The future P/E multiple has increased meaningfully from roughly 13.9x to about 16.3x, indicating a higher valuation placed on expected earnings.