Helmerich & Payne (HP) Downgraded at Citi
The stock of Helmerich & Payne, Inc. (NYSE:HP) has recently been downgraded by analysts at Citi. Let's shed some light on the development.
An offshore drilling rig in the Gulf of Mexico surrounded by a sea of blue.
Helmerich & Payne, Inc. (NYSE:HP) is one of the largest platform services operators in the world, delivering safe and efficient wells with Managed Pressure Drilling (MPD) technology and solutions. On May 19, 2025, the stock was downgraded by analysts at Citi from Buy to Neutral, with its price target also cut from $25 to $19. The revised outlook comes as a result of increasing difficulties for the oilfield servicing sector due to plunging prices of crude oil, resulting in an anticipated decline in rig counts and lower drilling activity. The tariffs on steel and aluminum have also raised costs for the industry and reduced its margins.
Citi analysts project an 8.5% decrease in Helmerich & Payne, Inc. (NYSE:HP)'s active rig count, which translates to 13 fewer rigs, coupled with an approximate 10% fall in rates. As a result, the company is anticipated to witness a 25% reduction in margins over the next few years, which will then have an impact on its EBITDA as well as cash flow.
Earlier this month, Helmerich & Payne, Inc. (NYSE:HP) reported mixed results for its Q1 2025, with its EPS of $0.02 significantly falling behind estimates by $0.6. However, the company's revenue surged by 47.7% YoY to just over $1 billion during the quarter, topping expectations by more than $60 million.
While we acknowledge the potential of HP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than HP and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 10 Cheap Energy Stocks to Buy Now and 10 Most Undervalued Energy Stocks According to Hedge Funds.
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