Yahoo Finance Analysts’ Recommendations for Noble and Its Valuation
Did Noble Beat 1Q16 Earnings and Revenue Estimates?
Analysts’ recommendations for Noble
Of the 39 analysts covering Noble, 28% have given it “buy” recommendations, 38% have given it “hold” recommendations, and 33% have given it “sell” recommendations.
The average target price for Noble is $9.50 compared to its current price of $11.27, as of April 28, 2016. This implies a potential downside of 15%. Argus Research Group has issued NE its highest target price of $17. NE’s lowest target price of $4.75 came from Goldman Sachs.
Recent downgrade
On April 21, Swedbank downgraded Noble to “reduce” from “eutral.” It kept its 12-month target price unchanged at $11.
Valuation multiple
The forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple is used to value and compare offshore drilling (OIH) companies. Noble’s EV-to-EBITDA multiple is 7.1x as of April 28, 2016.
Past comparison
Noble is currently trading above its average three-year multiple. Its average EV-to-EBITDA multiple for the past three years was 6.4x, whereas its highest and lowest multiples in the past three years were 7.7x and 5.1x, respectively.
Comparing multiples with peers
Noble’s current valuation multiple of 7.1x is higher than those of Rowan Companies (RDC) and Seadrill Partners (SDLP), which are at 4.9x and 4.3x, respectively. Diamond Offshore Drilling (DO), Pacific Drilling (PACD), Seadrill (SDRL), and Transocean (RIG) are trading at EV-to-EBITDA multiples of 8.0x, 7.9x, 7.3x, and 7.8x, respectively.
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