Oil and Gas Drilling Group Sees 74.4% 2026 EPS Cut, Trades at 13.7x EV/EBITDA
Analysts have cut oil and gas drilling sector earnings estimates by 74.4% for 2026 and 54.6% for 2027 over the past year, pressuring valuation multiples. The drilling sector, including Nabors Industries, trades at a trailing EV/EBITDA of 13.7x compared with 17.9x for the S&P 500.
1. Industry Earnings Estimate Revisions
Aggregate earnings forecasts for the oil and gas drilling sector have plunged by 74.4% for 2026 and 54.6% for 2027 over the past year, reflecting heightened pressure on profit margins and free cash flow generation among rig operators.
2. Valuation Metrics
The sector currently trades at a trailing enterprise value/EBITDA ratio of 13.7x, significantly below the S&P 500’s 17.9x multiple, underscoring a valuation discount for capital-intensive drilling companies like Nabors Industries.
3. Market Outlook Drivers
Persistent oil market oversupply and disciplined capital spending have curtailed new rig contracts, while structural growth in natural gas demand and expanding multiyear contracts in the Middle East and Latin America present potential support for future drilling activity.