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Noble Corp. (New York Stock Exchange: NO) +1.2% in trading on Friday when Susquehanna initiated coverage with a Neutral rating and a $52 price target, praising the offshore driller's concentration of ultra-deepwater assets that are in high demand in the current market.
The offshore drilling market is booming, with the The industry is at its highest level of utilization since 2014, said Charles Minervino of Susquehanna, as favorable commodity prices and a broad push toward global energy security have spurred a new cycle in ultra-deepwater drilling.
Noble (NE) has participated in the wave, increasing EBITDA from $376 million in 2022 to an estimated $807 million in 2023, and Minervino forecasts additional asset utilization and price growth that will contribute to a compound annual growth rate of the EBITDA of ~20% over 2023-25. time frame.
While the analyst sees potential for a further increase in off-year daily rate assumptions, “this is offset by concerns that economic uncertainty could impact crude oil demand,” and Noble's (NE) valuation reflects largely the favorable prospects for EBITDA growth in the coming years to 2024.
