Noble (NYSE:NE) Shares Gap Up Following Strong Earnings

Key Points

• Earnings beat sent Noble shares sharply higher — the stock gapped up to $52 (last around $53.75) after Q results showed EPS of $0.26 versus $0.21 expected and revenue of $785.7M versus $730.8M, despite revenue being down 10.1% YoY.
• Dividend concerns: Noble paid a $0.50 quarterly dividend (annualized $2.00, ~3.7% yield) but the payout ratio is an elevated 148.15%, raising sustainability questions.
• Mixed sentiment and insider selling: insiders sold roughly 328,805 shares (~$15.1M) last quarter, and analysts' consensus is a "Reduce" rating with an average target of $41.50, below the current share price.

Noble Corporation PLC (NYSE:NE - Get Free Report)'s share price gapped up before the market opened on Monday after the company announced better than expected quarterly earnings. The stock had previously closed at $49.54, but opened at $52.00. Noble shares last traded at $53.7540, with a volume of 177,153 shares.

The company reported $0.26 EPS for the quarter, topping the consensus estimate of $0.21 by $0.05. The business had revenue of $785.69 million for the quarter, compared to analyst estimates of $730.80 million. Noble had a return on equity of 2.34% and a net margin of 6.60%.The company's quarterly revenue was down 10.1% on a year-over-year basis. During the same quarter in the previous year, the company earned $0.26 EPS.

Noble Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, March 19th. Investors of record on Wednesday, March 4th were paid a $0.50 dividend. The ex-dividend date of this dividend was Wednesday, March 4th. This represents a $2.00 dividend on an annualized basis and a yield of 3.7%. Noble's dividend payout ratio is presently 148.15%.

Wall Street Analysts Forecast Growth

A number of equities research analysts recently issued reports on NE shares. Barclays lowered Noble from an "overweight" rating to an "equal weight" rating and upped their target price for the company from $36.00 to $41.00 in a research note on Wednesday, February 18th. Evercore set a $45.00 target price on Noble in a research note on Friday, February 13th. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Noble in a research note on Monday, December 29th. Susquehanna upped their target price on Noble from $45.00 to $50.00 and gave the company a "neutral" rating in a research note on Tuesday, April 7th. Finally, SEB Equity Research set a $33.00 target price on Noble in a research note on Tuesday, January 27th. One equities research analyst has rated the stock with a Buy rating, nine have given a Hold rating and two have issued a Sell rating to the company's stock. Based on data from MarketBeat, Noble has an average rating of "Reduce" and an average target price of $41.50.

Insider Activity at Noble

In other news, SVP Blake Denton sold 23,255 shares of the company's stock in a transaction on Tuesday, February 17th. The stock was sold at an average price of $43.50, for a total transaction of $1,011,592.50. Following the completion of the sale, the senior vice president directly owned 79,261 shares in the company, valued at $3,447,853.50. This represents a 22.68% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, CFO Richard B. Barker sold 150,000 shares of the company's stock in a transaction on Wednesday, March 18th. The stock was sold at an average price of $46.63, for a total value of $6,994,500.00. Following the sale, the chief financial officer owned 164,781 shares of the company's stock, valued at approximately $7,683,738.03. The trade was a 47.65% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 328,805 shares of company stock worth $15,067,754. Company insiders own 1.50% of the company's stock.

Institutional Trading of Noble

Institutional investors and hedge funds have recently made changes to their positions in the company. SG Americas Securities LLC increased its holdings in shares of Noble by 424.2% during the 4th quarter. SG Americas Securities LLC now owns 440,342 shares of the company's stock worth $12,435,000 after buying an additional 356,333 shares during the last quarter. Hara Capital LLC acquired a new stake in Noble in the 4th quarter valued at $4,902,000. De Lisle Partners LLP acquired a new stake in Noble in the 4th quarter valued at $824,000. Hosking Partners LLP increased its holdings in Noble by 10.0% in the 4th quarter. Hosking Partners LLP now owns 1,140,328 shares of the company's stock valued at $32,203,000 after purchasing an additional 103,477 shares in the last quarter. Finally, GAMMA Investing LLC increased its holdings in Noble by 77.8% in the 4th quarter. GAMMA Investing LLC now owns 1,440 shares of the company's stock valued at $41,000 after purchasing an additional 630 shares in the last quarter. 68.14% of the stock is currently owned by institutional investors and hedge funds.

Noble Trading Up 8.3%

The stock has a market capitalization of $8.56 billion, a price-to-earnings ratio of 39.73 and a beta of 1.00. The company has a debt-to-equity ratio of 0.43, a quick ratio of 1.67 and a current ratio of 1.67. The firm has a fifty day moving average of $47.28 and a 200-day moving average of $36.97.

About Noble

Noble NYSE: NE is an offshore drilling company that provides drilling services to the global oil and gas industry. The firm operates a fleet of mobile offshore drilling units and delivers contract drilling solutions for exploration and production activities. Its core business centers on executing drilling programs for upstream energy companies across a range of water depths and operating environments.

Products and services include the operation and management of offshore drilling rigs — such as drillships, semisubmersibles and jackups — along with associated technical, engineering and project management services.

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