Nabors Industries downgraded to Neutral from Buy at Citi

Citi analyst Scott Gruber downgraded Nabors Industries to Neutral from Buy with a price target of $75, down from $110, as part of a broader research note on U.S. Oil & Gas Equipment and Services. The firm notes that given the pull-back in crude, it is lowering its U.S. land rig count forecast to reflect a flat scenario through the end of 2025. Citi adds that it still expect gas drilling activity to rise by about 25 rigs through 2025-end, but now assumes this to be offset by an oil rig count drop of 25 rigs, reflecting a need to slow U.S. production growth. Citi’s downgrade on Nabor also assumes a 3-times expected forward EBITDA multiple, which appears appropriate given the company’s elevated debt load and limited near-term free cash flow, the firm added.