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NBR Stock Up 11.4% in a Month: Should Investors Hold or Move On?
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Key Takeaways
Nabors Industries' shares jumped 11.4% in a month, outpacing peers and the broader oil and energy sector.
Advanced SmartRig tech, debt cuts and divestitures strengthen Nabors Industries' balance sheet and focus.
Global rig deployments, especially in the Middle East and Latin America, drive NBR's growth outlook.
Nabors Industries Ltd. (NBR - Free Report) is one of the largest land-drilling contractors in the world that conducts oil, gas and geothermal land drilling operations. Since last month, shares of the company have risen about 11.4%, leaving investors wondering whether the recent positive trend will continue or if Nabors Industries is due for a pullback.
Lately, the company has been struggling with share price declines and a series of loss-making quarters. So, before we dive into how investors should react, let's take a quick look at its current standing and outcomes.
Where Do Price Performance & Estimates Stand for NBR Stock?
In the past month, Nabors Industries’ shares climbed about 11.4%, outperforming the Oil & Gas Drilling sub-industry’s gain of 4% and the broader oil and energy sector's modest rise of 3.2%. Peer comparison further highlights the strength, as Patterson-UTI Energy, Inc. (PTEN - Free Report) fell 1.9%,while Transocean Ltd. (RIG - Free Report) and Precision Drilling Corporation (PDS - Free Report) gained just 9.8% and 2.3%, respectively.
For 2025, the Zacks Consensus Estimate projects Nabors Industries’ loss to narrow from $20.28 per share a year ago to $4.86, reflecting a 76% year-over-year improvement. Moreover, the consensus mark for revenues is also pegged at $3.2 billion for 2025, implying a 10.2% year-over-year rise. The Zacks Consensus Estimate for Precision Drilling and Patterson-UTI’s 2025 revenues indicates a 5.4% and 11.4% year-over-year decline, respectively. The consensus mark for Transocean’s 2025 revenues indicates 11.2% growth.
NBR’s Earnings Estimate Overview
Image Source: Zacks Investment Research
What Is Working in Favor of Nabors Industries?
Record-Setting Technology & SmartRig Milestones: Nabors Industries’ PACE® series rigs set new drilling records in multiple U.S. basins. Clients are increasingly seeking advanced rigs to improve efficiency and reduce costs. The company’s ability to consistently deliver record performance strengthens its competitive positioning, driving demand, pricing power and long-term value creation. Recently, Nabors Industries and Caturus Energy joined forces to introduce the PACE-X Ultra X33 rig, which is expected to revolutionize shale exploration and extraction, particularly in the prolific South Texas natural gas fields. This deployment represents a significant leap forward in drilling efficiency, environmental sustainability and production capacity. Nabors Industries’ investment in this technology solidifies its position at the forefront of the energy transition while meeting current market needs.
Debt Reduction Priority: Nabors Industries has made debt reduction a core component of its financial strategy, and recent results show clear progress. In the second quarter of 2025, the company generated $41 million in adjusted free cash flow (FCF), a sharp turnaround from negative FCF in the first quarter, driven by stronger operating performance, Parker Wellbore’s contribution and lower cash interest outflows. Management remains committed to further debt reduction and recently announced that it intends to apply the proceeds of $250 million received from Superior’s recent notes offering for debt reduction. The company’s goal is to address the significant 2027 debt maturity well in advance, positioning Nabors Industries with a stronger balance sheet and lower financial risk going forward.
Strategic Asset Realignment: Nabors Industries’ recent $600 million divestiture of Quail Tools to Superior Energy marks a transformational move that strengthens its balance sheet, reduces net debt by over 25% and delivers $50 million in annual interest savings. The deal accelerates more than five years of projected free cash flow and positions Nabors Industries to unlock long-term shareholder value. By sharpening its focus on core drilling and rig operations following the Parker acquisition, the company ensures steady EBITDA contributions while gaining financial flexibility to pursue growth. This strategic realignment enhances resilience and supports value creation for shareholders.
International Opportunities: Nabors Industries sees strong growth potential in its international operations, with over 25 rig deployment opportunities identified across key markets. The Middle East remains a central driver, where the company’s SANAD joint venture (JV) continues to expand with multiyear newbuild contracts in Saudi Arabia and Kuwait. These additions not only provide long-term revenue visibility but also strengthen NBR’s competitive positioning in high-specification gas and unconventional drilling. In Latin America, activity in Argentina’s Vaca Muerta and Colombia offers further expansion prospects, with new contracts already secured for upcoming deployments. Together, these opportunities highlight Nabors Industries’ ability to leverage its global presence and advanced fleet to capture demand and support sustained earnings growth.
What’s Causing the Pressure on NBR Stock?
Customer Concentration and Payment Delays: Nabors Industries is experiencing major delays in receivables collection from Pemex, its key customer in Mexico, with second-quarter payments coming in far below expectations. Although the Mexican government has unveiled a $12 billion financing plan to tackle vendor obligations, there is no assurance that the company will receive the full amount in a timely manner. Adding to the challenge, one of Nabors Industries’ four offshore rigs in Mexico has reached the end of its contract. While renewal discussions are underway, Pemex’s ongoing cost-cutting efforts could result in lower day rates or even rig idling, creating potential pressure on the company’s liquidity and earnings.
Geopolitical & Market Volatility: Nabors Industries faces considerable exposure to geopolitical and market volatility that could weigh on results. In Saudi Arabia, rig suspensions and ongoing shifts in Aramco’s drilling priorities create uncertainty for utilization and margins. In Argentina, client slowdowns and delayed deployments pose near-term risks, while collection issues in Mexico highlight broader regional fragility. On top of this, global trade tensions and broader geopolitical risks may disrupt project timelines or pricing, making forward visibility less certain despite a strong backlog.
Overdependence on SANAD JV for Growth: While the SANAD JV offers long-term growth potential through its 50-rig newbuild program, Nabors Industries remains highly reliant on Saudi Aramco’s capital spending plans. Saudi Arabia has been redirecting its drilling activity from oil to gas, resulting in 64 land rig suspensions since 2024, including three SANAD rigs. Although recent newbuild awards, such as the latest five-rig tranche, provide momentum, any slowdown in Aramco’s expansion — whether from budgetary pressures or geopolitical developments — could weigh on Nabors Industries’ international revenues.
Heavy Debt Load Remains a Risk: Nabors Industries’ long-term debt stood at $2.7 billion as of June 30, 2025, reflecting a total debt-to-total capital of 80.7%. Interest expense during the second quarter also reached $56 million, eroding profitability and limiting financial flexibility. Although management plans refinancing, elevated debt burdens make the company vulnerable to credit market conditions and interest rate changes. Any delay in free cash flow growth or refinancing execution could intensify balance sheet risk, deterring risk-averse investors. In terms of debt load, Nabors Industries has a competitive edge over Precision Drilling and Transocean, which, in their second-quarter results, reported a high long-term debt of C$5.5 billion and $6.5 billion, respectively. However, Patterson-UTI maintains a low debt of $1.2 billion.
Final Words on NBR Stock
Nabors Industries’ stock stands out, backed by its recent outperformance versus peers Precision Drilling, Transocean and Patterson-UTI, significant revenue and earnings improvements expected in 2025, and continued technological leadership through milestone-setting SmartRig deployments and upgraded fleet offerings. The company’s aggressive debt reduction and divestiture of Quail Tools have fortified its balance sheet and increased annual interest savings, while abundant international growth opportunities — especially through JV successes in the Middle East and new contracts in Latin America — offer visible paths for expansion. However, investors should note risks such as high debt levels, customer concentration issues (notably with Pemex in Mexico) and geographic earnings volatility — factors that could limit upside if not managed effectively. In this context, investors should consider staying invested in the Zacks Rank #3 (Hold) company now.
Image: Shutterstock
NBR Stock Up 11.4% in a Month: Should Investors Hold or Move On?
Key Takeaways
Nabors Industries Ltd. (NBR - Free Report) is one of the largest land-drilling contractors in the world that conducts oil, gas and geothermal land drilling operations. Since last month, shares of the company have risen about 11.4%, leaving investors wondering whether the recent positive trend will continue or if Nabors Industries is due for a pullback.
Lately, the company has been struggling with share price declines and a series of loss-making quarters. So, before we dive into how investors should react, let's take a quick look at its current standing and outcomes.
Where Do Price Performance & Estimates Stand for NBR Stock?
In the past month, Nabors Industries’ shares climbed about 11.4%, outperforming the Oil & Gas Drilling sub-industry’s gain of 4% and the broader oil and energy sector's modest rise of 3.2%. Peer comparison further highlights the strength, as Patterson-UTI Energy, Inc. (PTEN - Free Report) fell 1.9%,while Transocean Ltd. (RIG - Free Report) and Precision Drilling Corporation (PDS - Free Report) gained just 9.8% and 2.3%, respectively.
NBR, PDS, PTEN & RIG’s One-Month Stock Price Performance
Image Source: Zacks Investment Research
For 2025, the Zacks Consensus Estimate projects Nabors Industries’ loss to narrow from $20.28 per share a year ago to $4.86, reflecting a 76% year-over-year improvement. Moreover, the consensus mark for revenues is also pegged at $3.2 billion for 2025, implying a 10.2% year-over-year rise. The Zacks Consensus Estimate for Precision Drilling and Patterson-UTI’s 2025 revenues indicates a 5.4% and 11.4% year-over-year decline, respectively. The consensus mark for Transocean’s 2025 revenues indicates 11.2% growth.
NBR’s Earnings Estimate Overview
Image Source: Zacks Investment Research
What Is Working in Favor of Nabors Industries?
Record-Setting Technology & SmartRig Milestones: Nabors Industries’ PACE® series rigs set new drilling records in multiple U.S. basins. Clients are increasingly seeking advanced rigs to improve efficiency and reduce costs. The company’s ability to consistently deliver record performance strengthens its competitive positioning, driving demand, pricing power and long-term value creation. Recently, Nabors Industries and Caturus Energy joined forces to introduce the PACE-X Ultra X33 rig, which is expected to revolutionize shale exploration and extraction, particularly in the prolific South Texas natural gas fields. This deployment represents a significant leap forward in drilling efficiency, environmental sustainability and production capacity. Nabors Industries’ investment in this technology solidifies its position at the forefront of the energy transition while meeting current market needs.
Debt Reduction Priority: Nabors Industries has made debt reduction a core component of its financial strategy, and recent results show clear progress. In the second quarter of 2025, the company generated $41 million in adjusted free cash flow (FCF), a sharp turnaround from negative FCF in the first quarter, driven by stronger operating performance, Parker Wellbore’s contribution and lower cash interest outflows. Management remains committed to further debt reduction and recently announced that it intends to apply the proceeds of $250 million received from Superior’s recent notes offering for debt reduction. The company’s goal is to address the significant 2027 debt maturity well in advance, positioning Nabors Industries with a stronger balance sheet and lower financial risk going forward.
Strategic Asset Realignment: Nabors Industries’ recent $600 million divestiture of Quail Tools to Superior Energy marks a transformational move that strengthens its balance sheet, reduces net debt by over 25% and delivers $50 million in annual interest savings. The deal accelerates more than five years of projected free cash flow and positions Nabors Industries to unlock long-term shareholder value. By sharpening its focus on core drilling and rig operations following the Parker acquisition, the company ensures steady EBITDA contributions while gaining financial flexibility to pursue growth. This strategic realignment enhances resilience and supports value creation for shareholders.
International Opportunities: Nabors Industries sees strong growth potential in its international operations, with over 25 rig deployment opportunities identified across key markets. The Middle East remains a central driver, where the company’s SANAD joint venture (JV) continues to expand with multiyear newbuild contracts in Saudi Arabia and Kuwait. These additions not only provide long-term revenue visibility but also strengthen NBR’s competitive positioning in high-specification gas and unconventional drilling. In Latin America, activity in Argentina’s Vaca Muerta and Colombia offers further expansion prospects, with new contracts already secured for upcoming deployments. Together, these opportunities highlight Nabors Industries’ ability to leverage its global presence and advanced fleet to capture demand and support sustained earnings growth.
What’s Causing the Pressure on NBR Stock?
Customer Concentration and Payment Delays: Nabors Industries is experiencing major delays in receivables collection from Pemex, its key customer in Mexico, with second-quarter payments coming in far below expectations. Although the Mexican government has unveiled a $12 billion financing plan to tackle vendor obligations, there is no assurance that the company will receive the full amount in a timely manner. Adding to the challenge, one of Nabors Industries’ four offshore rigs in Mexico has reached the end of its contract. While renewal discussions are underway, Pemex’s ongoing cost-cutting efforts could result in lower day rates or even rig idling, creating potential pressure on the company’s liquidity and earnings.
Geopolitical & Market Volatility: Nabors Industries faces considerable exposure to geopolitical and market volatility that could weigh on results. In Saudi Arabia, rig suspensions and ongoing shifts in Aramco’s drilling priorities create uncertainty for utilization and margins. In Argentina, client slowdowns and delayed deployments pose near-term risks, while collection issues in Mexico highlight broader regional fragility. On top of this, global trade tensions and broader geopolitical risks may disrupt project timelines or pricing, making forward visibility less certain despite a strong backlog.
Overdependence on SANAD JV for Growth: While the SANAD JV offers long-term growth potential through its 50-rig newbuild program, Nabors Industries remains highly reliant on Saudi Aramco’s capital spending plans. Saudi Arabia has been redirecting its drilling activity from oil to gas, resulting in 64 land rig suspensions since 2024, including three SANAD rigs. Although recent newbuild awards, such as the latest five-rig tranche, provide momentum, any slowdown in Aramco’s expansion — whether from budgetary pressures or geopolitical developments — could weigh on Nabors Industries’ international revenues.
Heavy Debt Load Remains a Risk: Nabors Industries’ long-term debt stood at $2.7 billion as of June 30, 2025, reflecting a total debt-to-total capital of 80.7%. Interest expense during the second quarter also reached $56 million, eroding profitability and limiting financial flexibility. Although management plans refinancing, elevated debt burdens make the company vulnerable to credit market conditions and interest rate changes. Any delay in free cash flow growth or refinancing execution could intensify balance sheet risk, deterring risk-averse investors. In terms of debt load, Nabors Industries has a competitive edge over Precision Drilling and Transocean, which, in their second-quarter results, reported a high long-term debt of C$5.5 billion and $6.5 billion, respectively. However, Patterson-UTI maintains a low debt of $1.2 billion.
Final Words on NBR Stock
Nabors Industries’ stock stands out, backed by its recent outperformance versus peers Precision Drilling, Transocean and Patterson-UTI, significant revenue and earnings improvements expected in 2025, and continued technological leadership through milestone-setting SmartRig deployments and upgraded fleet offerings. The company’s aggressive debt reduction and divestiture of Quail Tools have fortified its balance sheet and increased annual interest savings, while abundant international growth opportunities — especially through JV successes in the Middle East and new contracts in Latin America — offer visible paths for expansion. However, investors should note risks such as high debt levels, customer concentration issues (notably with Pemex in Mexico) and geographic earnings volatility — factors that could limit upside if not managed effectively. In this context, investors should consider staying invested in the Zacks Rank #3 (Hold) company now.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.