Assessing NOV (NOV) Valuation After Rising Analyst Optimism And Increased Institutional Ownership

Why NOV is back on investors’ radar

Interest in NOV (NOV) has picked up as several Wall Street firms reaffirm positive views on the stock, and London based Oldfield Partners lifts its ownership with a larger disclosed position.

See our latest analysis for NOV.

At a share price of $17.53, NOV has recently seen a 90 day share price return of 42.40% and a 1 year total shareholder return of 25.69%, suggesting momentum has picked up even though the 3 year total shareholder return of 19.51% shows a weaker longer term record.

If NOV has caught your eye, this can be a good moment to widen your watchlist and check out aerospace and defense stocks that could offer a different risk and return profile.

With NOV trading at $17.53, an intrinsic discount flag of 0.51206 and a price slightly above the current analyst target, the key question is whether the market is overlooking value or already pricing in future growth.

Most Popular Narrative: 7.4% Overvalued

With NOV last closing at $17.53 against a narrative fair value of $16.33, the current price sits above where this widely followed view lands, raising questions about what assumptions support that gap.

The analysts have a consensus price target of $15.381 for NOV based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $20.0, and the most bearish reporting a price target of just $11.0.

Read the complete narrative.

Curious what kind of revenue path, margin profile, and earnings multiple are baked into that fair value, and how share count changes factor in over time? The full narrative lays out a detailed financial roadmap and the assumptions that bridge today’s earnings to that future profit target.

Result: Fair Value of $16.33 (OVERVALUED)

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

However, if tariffs, inflation and trade policy continue to pressure margins, or if large offshore orders are delayed again, the earnings path behind that fair value could quickly appear optimistic.

Find out about the key risks to this NOV narrative.

Another View: Multiples Tell a Different Story

While the consensus narrative flags NOV as about 7.4% overvalued versus a fair value of $16.33, the market is pricing the stock at a P/E of 16.7x, close to its fair ratio of 17x and well below peers at 31.2x and the US Energy Services industry at 20.6x.

That combination of a narrow gap to the fair ratio, a discount to peers and the broader industry, and an analyst target below the current price raises a straightforward question: is the market underestimating NOV's risks, or is it offering a margin of safety on future earnings?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own NOV Narrative

If parts of this narrative do not sit right with you, or you would rather test the numbers yourself, you can build a tailored view in just a few minutes: Do it your way

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

Looking for more investment ideas?

If NOV has your attention, do not stop there. Use the same lens across other themes so you are not relying on a single stock story.

• Spot potential mispriced opportunities early by hunting through these 3540 penny stocks with strong financials that already show stronger financial foundations than many tiny peers.
• Ride long term trends in automation and data by checking out these 28 AI penny stocks that link artificial intelligence themes with listed companies.
• Build a watchlist of possible value ideas by running through these 877 undervalued stocks based on cash flows that screen for gaps between prices and cash flow based estimates.

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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