Barclays upgrades Helmerich & Payne stock rating on expected recovery

Barclays has upgraded Helmerich & Payne (HP) to Overweight with a raised price target of $25, citing expectations that the land drilling company has moved past its worst challenges, including a trough in the U.S. onshore rig count and potential lifting of international rig suspensions, particularly in Saudi Arabia. This positive outlook is supported by HP's strong Q3 2025 financial results, which exceeded EPS and revenue expectations, and resilient North American margins, leading TD Cowen to also raise its price target to $27.

Analysis

Helmerich & Payne (HP) has received a significant vote of confidence from Barclays, which upgraded the stock to Overweight from Equalweight and raised its price target to $25.00 from $17.00. The core of the thesis is that the land drilling company is past its cyclical and operational troughs. Barclays anticipates the U.S. onshore rig count is bottoming out and projects a rebound in HP's active rigs in fiscal 2026. On the international front, challenges from the KCA Deutag acquisition, which saw 27 rigs suspended in Saudi Arabia, are viewed as resolving. There is potential for 10 of these suspensions to be lifted next year, and a recent Saudi Aramco tender for 33 gas rigs offers a material upside catalyst, as 16 of HP's suspended rigs are gas-capable. This optimistic outlook is substantiated by strong recent fundamentals; the company posted a 22.22% earnings beat in Q3 2025 with an EPS of $0.22 and surpassed revenue forecasts at $1.04 billion. Furthermore, the company maintains a strong liquidity position with a current ratio of 1.84 and has achieved nearly 26% revenue growth over the last twelve months. While TD Cowen remains more cautious with a Hold rating, it also raised its price target to $27.00, acknowledging resilient North American margins and signs of international stabilization. This analyst optimism comes after the stock has declined 36% year-to-date, suggesting a potential inflection point.

Key Decisions for Investors

• Given the Barclays upgrade, strong earnings beat, and specific catalysts for recovery in both U.S. and international markets, investors could view the stock's 36% year-to-date decline as an attractive entry point for a long position.
• Monitor key leading indicators for validation of the turnaround thesis, specifically the U.S. onshore rig count for signs of a bottom and news flow related to the lifting of rig suspensions or wins from the new Saudi Aramco tender.
• While the outlook is positive, investors should weigh the bullish Barclays thesis against TD Cowen's more cautious Hold rating, acknowledging that the projected recovery in rig activity is not immediate but forecast for fiscal 2026, implying execution risk still exists.