Nabors Industries’ Perspective in Q2 2026: KEY Takeaways

U.S. Outlook and Project Update

We have already discussed Nabors Industries' (NBR) Q2 2026 financial performance in our recent article. Here is an outline of its strategies and outlook. In the US onshore, NBR added five rigs across oil, gas, and geothermal markets, outperforming broader industry trends. The company believes its focus on large public operators provides greater technology adoption, longer contracts, and stronger earnings visibility.

The company expanded into next-generation geothermal drilling with Quaise Energy's first commercial super-hot geothermal project in Oregon. The company also deployed two new PACE-X Ultra rigs (high-specification AC drilling rigs) for Caturus in Texas. Canrig (NBR’s drilling equipment and automation technology division) commercialized its fully automated TITAN rig floor wrench. Nabors' ROCKit drilling software won new business by replacing a competing technology on third-party rigs. 

Q3 & FY2026 Outlook and Guidance

Management expects international rig activity to increase, supported by new SANAD, Argentina, and Indonesia deployments. International margins are also expected to improve on higher-margin rig additions and strong execution. 

In the U.S., the Lower 48 rig count is expected to increase modestly, while daily margins remain stable. Management expects industry activity to strengthen gradually as oil prices stabilize and natural gas demand improves. The company raised its FY2026 EBITDA guidance to $920–930 million. Management also expects to exceed its free cash flow guidance despite continued investment in the SANAD program. Nabors reduced its 2026 capital spending outlook due to the timing of SANAD newbuild milestones.

SANAD Update And Latin America Outlook

Saudi Arabia's land rig market continued to recover, with SANAD maintaining its position as the country's largest drilling contractor. Nabors' Gulf operations in Kuwait and Oman continued uninterrupted, supported by long-term contracts and new tender opportunities. Management believes these markets provide a strong international growth corridor for high-specification rigs. 

Argentina remains one of Nabors' strongest international markets, where the company holds the largest market share. Nabors is expanding its fleet to 14 rigs in the country. The company also continues to redeploy idle U.S. rigs into international markets under long-term contracts.

Pricing Outlook

Leading-edge day rates continued to improve as rig utilization tightened. Management expects pricing to reach or exceed the mid-$30,000 per day range through late 2026 and into 2027. Average daily margins also increased, supported by stronger pricing and solid operational execution. 

Relative Valuation

NBR is currently trading at an EV/EBITDA multiple of 4.4x. Based on sell-side analysts' EBITDA estimates, the forward EV/EBITDA multiple is lower. The current multiple is lower than its five-year average EV/EBITDA multiple of 5.5x.

NBR's forward EV/EBITDA multiple contraction versus the current EV/EBITDA is less steep than its peers because the company's EBITDA is expected to increase less sharply than its peers in the next four quarters. This typically results in a lower EV/EBITDA multiple compared to its peers. The stock's EV/EBITDA multiple is much lower than its peers' (HP, PTEN, and PDS) average of 6.3x. So, the stock is reasonably valued, with a positive bias, compared to its peers.

Final Commentary

Nabors’ management expects international rig activity to increase, supported by new SANAD, Argentina, and Indonesia deployments. International margins are also expected to improve on higher-margin rig additions and strong execution. In the U.S., the Lower 48 rig count is expected to increase modestly, while daily margins remain stable. 

It also expects industry activity to strengthen gradually as oil prices stabilize and natural gas demand improves. Nabors reduced its 2026 capital spending outlook due to the timing of SANAD newbuild milestones. The company raised its FY2026 EBITDA guidance and expects to exceed its FCF guidance despite continued investment in the SANAD program. The stock is reasonably valued compared to its peers.