UPDATE: Jefferies Upgrades Nabors Industries ltd. to Hold, Reiterates $14 PT on Further Dayrate/Margin Reduction

In a report published Thursday, Jefferies analyst Brad Handler upgraded the rating on Nabors Industries Ltd.

from Underperform to Hold, and reiterated the $14.00 price target. In the report, Handler noted, “We are lowering our 2013E by $0.05 to $0.90 to reflect further dayrate/margin reduction in U.S. lower 48 contract drilling and we remain modestly below Consensus. However, we upgrade to Hold from Underperform for a number of reasons. (1) We think NBR's challenges with respect to near term U.S. and International contract drilling and pressure pumping profitability are well reflected in estimates. (2) We acknowledge the potential for change in the organization, as hinted by modest BoD changes, modestly improved prospects to sell its E&P stakes as well as perhaps other businesses and the apparent attractiveness of the PACE-X offering. (3) Although perhaps modest, we do look for inflection upwards in the rig count and pressure pumping activity from 1Q13 levels – although we admit with a likely less robust response for NBR than peers overall, in our view. And (4) with underperformance in shares YTD, at least relative to the OSX if not other land drillers, there is limited downside to our unchanged $14 PT.” Nabors Industries Ltd. closed on Wednesday at $14.64.