Nabors Industries stock and the industry
Nabors Industries’ (NBR) one-year stock price fell 35.0% as of September 1, 2017. In the past year, the Energy Select Sector SPDR ETF (XLE) has fallen 8.0%. The VanEck Vectors Oil Services ETF (OIH) has fallen 19.0% in the same period. NBR has underperformed both XLE and OIH in the past year. The Dow Jones Industrial Average (DJIA-INDEX) has risen 19.0% in the past year. The SPDR S&P 500 ETF (SPY) has performed better than Nabors Industries in that period, rising 13.0%.
Crude oil price and rigs
On September 1, 2017, the price of WTI (West Texas Intermediate) crude oil was 6.0% higher than a year ago. Prompted by the crude oil price strength, the US rig count rose 90.0% in the past year. You can learn more on crude oil in Market Realist’s Harvey’s Impact on US Supply, Demand, Crude Oil, and Gas. You can also read about prominent OFS (oilfield services and equipment) companies, including Weatherford International (WFT) and National Oilwell Varco (NOV), in Market Realist’s NBR, HAL, NOV, WFT: How They Stack Up after 2Q17.
Factors that could affect Nabors Industries’ returns
- On August 14, 2017, Nabors Industries (NBR) signed an agreement to acquire its OFS industry peer Tesco (TESO). Read more on this in Market Realist’s Can Nabors Bank on Synergies from Tesco?
- NBR’s management expects to add eight to ten rigs in North America onshore in 3Q17.
- NBR expects to add eight to ten more rigs in 4Q17.
- Rig additions may moderate in the future due to slower growth in the US onshore market.
- Revenue per day should continue to improve as more SmartRigs (advanced rigs) roll to higher spot rates.
In this series, we’ll look at short interest in Nabors Industries and its correlation with crude oil. Let’s start by looking at Nabors Industries’ stock forecast.