Noble Corp. (NE) Slips To 52-Week Low: What's Pulling It Down?

Shares of Noble Corporation (NYSE:NE) sank to a new 52-week low of $5.70 on Tuesday before closing the day higher at $5.74.

Noble Corp. provides diversified services for the oil and gas industry. The company offers contract drilling services with a fleet of offshore drilling units. The company renders contract drilling services along with provision of labor contract drilling, engineering and consulting, and project management services. The company offers its services in the United States, the Middle East, India, Mexico, the North Sea, Brazil, and West Africa.

In the current environment, there is a severe dearth of contracts for all drillers; even for those with good rigs. However, Noble Corp.’s strong management skills, farsightedness and superior capability are positives that will help the company to survive this crisis.

Earlier this month the company reported the early termination of its drilling contract for one of its jackup rig with Quadrant Energy. The contract is now expected to conclude during the second half of Sep 2016. As part of the contract, Noble Corp. will receive a demobilization fee as well as 50% of the operating dayrate through the original contract expiration date from the customer. Most underwater drillers continue to trade on oil prices that are still very volatile.

NOBLE CORP PLC Price and Consensus

NOBLE CORP PLC Price and Consensus | NOBLE CORP PLC Quote

Also, downward estimate revisions over the last 90 days added to Noble Corp.’s losing value in the market. Analysts have turned bearish on the company’s growth prospects and are therefore pushing down estimates. The Zacks Consensus Estimate for 2016 detriorated to earnings of 2 cents per share from 50 cents per share over the last 90 days.

Noble Corp. currently holds a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the same space are Devon Energy Corporation (NYSE:DVN) , NGL Energy Partners LP (NYSE:NGL) and Enbridge Energy Partners L.P. (NYSE:EEP) , each sporting a Zacks Rank #1 (Strong Buy).

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