HP Stock Forecast & Price Target

Helmerich & Payne, Inc. is poised to enhance its market presence, with expectations of a flat to slightly higher rig count and a notable 27% share of Baker Hughes' horizontal rig count, reflecting a strategic position amid improving market dynamics. The company anticipates catalysts such as higher commodity prices and stronger service pricing, which could drive increased exploration and production spending, thereby bolstering drilling activity and revenues. Furthermore, the recent merger with KCA is expected to accelerate Helmerich & Payne's international growth strategy, particularly in the Middle East, while improved margins per day are forecasted for FY25, indicating robust operational efficiency and a positive outlook for profitability.

The analysis indicates a negative outlook for Helmerich & Payne, primarily due to lower near-term growth visibility and reduced industry activity, evidenced by a 4% year-over-year decline in expected gross margin to $1,033 million in 2025. Additionally, the company has experienced a decrease in rig count and average revenue per day, with North America Solutions revenue dropping by 2% quarter-over-quarter to approximately $39,100, while direct margins also fell accordingly. Furthermore, significant rig suspensions in the Middle East have led to a drop in run-rate EBITDA projections from $340 million to between $250 million and $260 million, and overall FY25 and FY26 EBITDA estimates have been reduced by 12% and 9%, respectively.