Skip to Content

Helmerich & Payne Inc HP

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Low Drilling Activity Weighs on Helmerich & Payne’s Fiscal-Year 2021 Results; Brighter Days Ahead

Analyst Note

| Katherine Olexa |

Helmerich & Payne ended its fiscal-year 2021 (ended September 2021) with total revenue 31% lower than its fiscal-year 2020. Operating margins dropped to negative 29% compared with negative 5% last year. After rolling our model to incorporate the full fiscal year, we slightly increase our fair value estimate to $29 from $27. We expect H&P’s steadily improving utilization rates will continue through fiscal 2022. Near-term headwinds include rig reactivation costs--reaching upwards of $1 million per rig--that will weigh on margins as H&P prepares to return to prepandemic utilization levels. However, we expect those additional costs will dissipate over the next year or so and forecast a midcycle operating margin of 13% by 2030, slightly lower than our prior estimate of 14.5%

Read Full Analysis

Company Profile

Business Description

Helmerich & Payne has the largest fleet of U.S. land drilling rigs. The company's FlexRig line is the leading choice to drill horizontal wells for production of U.S. tight oil and gas. H&P is present in nearly every major U.S. shale play and also has a small presence internationally.

Contact
1437 South Boulder Avenue, Suite 1400
Tulsa, OK, 74119
T +1 918 742-5531
Sector Energy
Industry Oil & Gas Drilling
Most Recent Earnings Sep 30, 2021
Fiscal Year End Sep 30, 2022
Stock Type Distressed
Employees 5,932

Related