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A Pre-Earnings Analysis of Nabors Industries before Its 1Q17 Release

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Part 4
A Pre-Earnings Analysis of Nabors Industries before Its 1Q17 Release PART 4 OF 7

Nabors Industries’s 7-Day Stock Price Forecast on April 19

Nabors Industries’s implied volatility

On April 19, 2017, Nabors Industries’s (NBR) implied volatility was ~48%. Since NBR’s 4Q16 financial results were announced on February 22, 2017, its implied volatility has increased from ~43% to its current level. NBR comprises 3.1% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES).

Nabors Industries’s 7-Day Stock Price Forecast on April 19

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Implied volatility for NBR’s peers

McDermott International’s (MDR) implied volatility on April 19 was ~48%, while Halliburton’s (HAL) implied volatility was ~30% on that day. You can learn more about HAL’s 1Q17 pre-earnings analysis in Market Realist’s A Pre-Earnings Analysis of Halliburton’s 1Q17 Release.

TechnipFMC’s (FTI) implied volatility on April 19 was ~33%.

Nabors Industries’s stock price forecast

Based on Nabors Industries’s implied volatility and assuming a normal distribution of stock prices and a probability of 68.2% (assuming a standard deviation of 1), NBR stock could close between $11.16–$12.76 in the next seven days. NBR’s stock price was $11.96 on April 19, 2017.

What does NBR’s implied volatility mean?

Implied volatility (or IV) reflects investors’ views of a stock’s potential movement. However, IV does not forecast direction. Implied volatility is derived from an option pricing model. Investors should note that the correctness of implied volatility’s suggested prices can be uncertain.

In the next article, we’ll discuss investors’ short interest in Nabors Industries stock.

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