Market Overview

UPDATE: J.P. Morgan Reiterates Overweight Rating, Lowers PT on Noble Corporation


In a report published Monday, J.P. Morgan reiterated its Overweight rating on Noble Corporation (NYSE: NE), but lowered its price target from $48.00 to $45.00.

J.P. Morgan noted, “NE reported adjusted 4Q12 EPS of $0.51, below both JPM/cons $0.61/0.62 estimate, with $0.07 of the miss from a higher tax rate of ~28% vs. our 19% target as the FY12 20.9% came in above mgmt's high end of 17-20% guidance range. While contract drilling revenues of $922mm was 2% higher than our target, contract drilling expenses of $484mm was a larger miss than we expected (6% higher than our $458mm target and 6-9% higher than mgmt's $445-455mm guide). Like 3Q, the cost miss was from start-up delays and other operational issues as five newbuilds and enhanced rigs accounted for 33% of downtime. On the positive side, NE announced contracts for two more newbuild jackups and indicated construction milestones were as expected for the next 3 contracted newbuild drillships and 3 jackups, including the Regina Allen for 3Q13 delivery. These rig specific delays will get worked out quickly, but execution concerns and two straight cost misses raise our concern that the company could miss its cost target again. We are currently modeling 1Q13 costs at the high end of mgmt's $485-495mm, while our FY13 is at the midpoint of mgmt's $2.05-2.15bn guidance range. We also lowered our estimated bonus revenue for the fleet to incorporate mgmt's 3.5-4.0% operational downtime guidance, which lowers our 2013/14E EPS to $2.95/4.75 from $4.10/5.70.”

Noble Corporation closed on Friday at $38.23.

Latest Ratings for NE

Oct 2019MaintainsUnderweight
Sep 2019DowngradesOutperformSector Perform
Sep 2019DowngradesNeutralSell

View More Analyst Ratings for NE
View the Latest Analyst Ratings

Posted-In: J.P. MorganAnalyst Color Price Target Analyst Ratings


Related Articles (NE)

View Comments and Join the Discussion!

Latest Ratings

TCBISunTrust Robinson HumphreyMaintains58.0
KMISunTrust Robinson HumphreyMaintains22.0
EXASBank of AmericaMaintains135.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

UPDATE: Citigroup Reiterates Neutral Rating, Raises PT on The Ryland Group

UPDATE: J.P. Morgan Reiterates Neutral Rating, Raises PT on Halliburton Company