RBC bullish on NOV, cautious on Liberty in energy sector stocks

March 25, 2025 03:55 AM AEDT | By Investing

Google News:

RBC bullish on NOV, cautious on Liberty in energy sector stocks

Recent News

What are next big copper projects? UBS tells when equipment makers cou...

EUR/USD poised to rack up more gains as ECB and Fed rate paths set to...

Carney launches ‘One Canadian Economy’ Act to unify trade, approvals

Trump signs orders to enhance drone defenses, support supersonic trave...

Investing.com --RBC Capital Markets upgraded NOV Inc to Outperform and downgraded Liberty Energy Inc to Sector Perform given the diverging growth prospects and risk profiles for the two companies.

RBC sees NOV as well-positioned to deliver strong results in 2025, driven by improving margins and consistent free cash flow.

The company has successfully addressed supply chain challenges and expects higher-margin backlog conversions to boost earnings.

RBC forecasts 6% EBITDA growth for NOV in 2025, outpacing the 2% average for large oilfield services peers.

NOV’s commitment to returning cash to shareholders is another positive, with plans to repurchase about 5-6% of outstanding shares in 2025.

RBC maintained its price target at $22, highlighting that the current valuation offers an attractive entry point.

But RBC took a more cautious stance on Liberty Energy due to its ambitious plans to expand into the power generation market.

While the strategy could drive long-term growth, it requires an estimated $4-5 billion in capital over 5-8 years, raising concerns about funding and execution.

Liberty expects to deliver 400MW of power capacity by 2025-26 but faces near-term challenges, including flat well completion activity and potential pricing pressures in its core fracturing business.

RBC also noted that Liberty’s free cash flow is expected to remain limited, with negative FCF projected in 2026 due to high capital spending. As a result, RBC lowered its price target to $19 from $24.

RBC’s ratings reflect a more confident outlook for NOV’s near-term performance, while Liberty Energy’s longer-term expansion plans introduce higher uncertainty.

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.