Helmerich & Payne (HP) Valuation in Focus Ahead of Earnings Update and Robust Dividend Yield

Helmerich & Payne is preparing to announce its fourth quarter earnings after the market closes on Monday. Many are watching closely as expectations point to a notable drop compared to last year. The company’s strong 4% dividend yield could still attract investors seeking regular income.

See our latest analysis for Helmerich & Payne.

Helmerich & Payne’s share price recently surged over 20% in the last month. Even with a 3.15% jump on the latest day, the longer-term picture remains mixed: the stock’s 1-year total shareholder return is still down more than 14%. After a year of volatility and some tough quarters, momentum seems to be building again ahead of the upcoming earnings update, with some investors eyeing a potential turnaround given stronger recent price action.

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The question for investors now is whether Helmerich & Payne’s recent rally signals an undervalued opportunity, or if the market has already factored in any potential rebound in growth and future performance.

Most Popular Narrative: 4.6% Overvalued

With the narrative placing fair value at $26.60, Helmerich & Payne’s last close price of $27.83 sits slightly above that mark. This small gap draws attention to the numbers and underlying story driving expectations right now.

The company's growing international footprint, highlighted by the successful KCA integration and new tender opportunities in Saudi Arabia and Argentina, positions H&P to capture incremental market share and expand EBITDA as geopolitical instability and supply concerns reinforce demand for high-spec rigs.

Read the complete narrative.

Want to know what bold assumptions are packed into this fair value? The narrative is built on a combination of improving margins and hefty profit projections. But there is more to the story than meets the eye. Dive into the details to uncover what is really fueling this valuation.

Result: Fair Value of $26.60 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent overcapacity in the rig market and H&P’s concentration in North America could limit upside if industry pressures intensify or demand weakens.

Find out about the key risks to this Helmerich & Payne narrative.

Another View: SWS DCF Model Suggests Deep Undervaluation

While the market is focusing on Helmerich & Payne's pricing against sales and analyst targets, our SWS DCF model offers a very different take. According to this method, shares are trading at a major 53.9% discount to their estimated fair value. This is a big gap. Are investors missing something, or are the risks understated?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Helmerich & Payne Narrative

If you have your own perspective, or want to dig deeper into the numbers yourself, you can quickly create your own view in just a few minutes. Do it your way

A great starting point for your Helmerich & Payne research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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