Helmerich & Payne (HP) valuation check after analyst upgrades and Saudi drilling growth expectations

Helmerich & Payne (HP) is back on investors radar after a flurry of upgrades, as Wall Street warms to its deleveraging plan, tighter capex, and exposure to Saudi drilling demand despite recent earnings noise.

See our latest analysis for Helmerich & Payne.

Those upgrades land after a choppy year, with a 36.03% 3 month share price return off the lows. Even so, year to date share price performance remains negative, while the 1 year total shareholder return of minus 3.98% shows sentiment is only just starting to repair.

If you are reassessing energy exposure after HP’s rebound, it is also worth scanning fast growing stocks with high insider ownership for other potentially overlooked compounders with aligned management incentives.

With HP trading below consensus targets but carrying a sizable intrinsic discount and mixed earnings trends, are investors still being compensated for the risk here, or has the market already priced in the next leg of growth?

Most Popular Narrative: 2.7% Overvalued

Helmerich & Payne’s most followed narrative pegs fair value near $27.20, just below the last close at $27.94, framing a tight valuation gap.

The Fair Value estimate has risen moderately from approximately $24.00 to about $27.20, reflecting a higher intrinsic valuation per share.

The future P/E multiple has increased meaningfully from roughly 13.9x to about 16.3x, indicating a higher valuation placed on expected earnings.

Read the complete narrative.

Want to see what justifies paying a richer future earnings multiple for a still recovering driller? The narrative leans on a carefully staged mix of revenue expansion, margin rebuilding, and a punchy earnings ramp that could surprise anyone only looking at today’s losses.

Result: Fair Value of $27.20 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative could unravel if shale overcapacity deepens or E&P consolidation drives tougher contract terms and structurally lower day rates.

Find out about the key risks to this Helmerich & Payne narrative.

Another Way to Look at Value

While the narrative pegs Helmerich & Payne at roughly 2.7% over fair value, our DCF model is far more optimistic, suggesting the shares trade about 54% below intrinsic value at roughly $61.12. One view sees limited upside, and the other suggests a deep discount. So which story do you trust?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Helmerich & Payne Narrative

If this view does not quite match your own, or you prefer to dig into the numbers yourself, you can build a custom narrative in just a few minutes, Do it your way.

A great starting point for your Helmerich & Payne research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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