Precision Drilling (PDS) Stock Forecast & Price Target

Precision Drilling Corp is demonstrating a positive outlook due to significant growth in its rig counts and enhanced gross margin expectations; the company's gross margin projections for 2026 have been adjusted upward by 3% to $330 million amidst a 2% increase in rig counts. Additionally, the company is expected to operate 37 rigs in Q4, a net increase of 3 rigs year-over-year, contrasting with an industry decline of 56 rigs. The firm’s improving balance sheet, increasing visibility in the U.S. market, and diversified international operations are positioned to drive further growth and facilitate multiple expansions from current valuation levels.

Precision Drilling Corp faces significant challenges that contribute to a negative outlook, including lower-than-forecast overall activity levels and disappointing high-spec rig utilization in the United States. The company is struggling to generate free cash flow, which hampers its ability to reduce debt, while prevailing weaker oil prices are leading to diminished demand for oil-directed drilling services. Additionally, the expectation of reduced working rigs and declining rig margins further compounds the financial pressures facing Precision Drilling, indicating a troubling trend in future earnings potential.