NOV (NOV) Stock Forecast & Price Target

NOV is expected to see continued growth in its energy products and services segment due to improvement in offshore activity and increased flexible pipe capacity in Brazil. Additionally, NOV's financial stability is supported by its strong backlog in its energy equipment business. The company also has a positive outlook for future orders and expects a capital equipment upcycle in 2027. However, potential risks include delays in the recovery of the North American drilling and completion market and ongoing disruptions in the Middle East. Our target price of $23 is based on a 7.0x EV/EBITDA multiple and is supported by a 10-year DCF analysis. The company's board lacks diversity, but its compensation is aligned with performance through STIP and LTIP programs. However, environmental factors and carbon emissions remain a material issue for the energy services industry.

NOV is facing near-term earnings challenges due to disruptions from the Iran War, which have impacted deliveries, delayed equipment shipments, and increased costs. Additionally, working capital tailwinds have largely abated, making FCF generation more consistent with peers at a 5% yield. Management has highlighted logistical and safety-related challenges that will likely continue in 2Q26 and normalize later in the year, leading to a reduction in near-term earnings expectations. Overall, NOV maintains strong fundamentals, but with ongoing challenges and a current EV/EBITDA multiple below peers, the stock is likely to underperform in the near term.