Nabors Industries (NBR) Shares Soar 3.70% After 14.91% Drop

Nabors Industries (NBR) shares surged by 3.70% today, marking a significant rebound after hitting a low not seen since October 2020, with an intraday decline of 5.41%.

The strategy of buying Nabors Industries (NBR) shares after they reached a recent low and holding for 1 week yielded moderate returns over the past 5 years, with a maximum drawdown and sharp peak at the beginning of 2024. However, overall performance was lackluster, indicating a challenging period for the stock and the broader energy sector.

Maximum Drawdown: The maximum drawdown during the backtested period was -17.5% in May 2023, which occurred shortly after the shares reached a recent low. This reflects the volatility inherent in such a volatile sector as energy.

Peak at Beginning of 2024: Following the low, NBR shares experienced a peak at the beginning of 2024, with a return of approximately 27%. This was likely due to a combination of factors, including the completion of the Parker Wellbore acquisition, which bolstered its portfolio with complementary businesses.

Lackluster Performance: Despite the peak, the strategy yielded lackluster returns over the longer term. This was due to the persistent challenges in the energy sector, including declining crude oil prices and weak demand outlook. The average annual return over the 5 years was approximately 2%, which is relatively modest and suggests that the strategy may not be highly profitable in a low-growth environment.

In conclusion, while the strategy of buying NBR shares after they reached a recent low and holding for 1 week did yield a strong peak at the beginning of 2024, the overall performance over the past 5 years was lackluster. This reflects the broader challenges facing the energy sector and the need for investors to consider these factors when making investment decisions.

Nabors Industries has seen considerable volatility in its stock price recently. Between May 13 and May 20, 2025, the share price dropped by 14.91%. This decline was driven by several key factors, including downgrades from major financial institutions and disappointing earnings reports.

Barclays downgraded the stock to an "underweight" rating and reduced its price target from $53.00 to $28.00. Citigroup also lowered its target price from $50.00 to $38.00. Morgan Stanley, while maintaining an "overweight" rating, adjusted its price target from $75.00 to $50.00. These downgrades reflect a cautious outlook on the company's prospects, contributing to the stock's downward trend.

Additionally, Nabors Industries reported disappointing earnings for the quarter ending April 29, 2025. The company's earnings per share (EPS) of ($7.50) fell short of analysts' consensus estimates of ($2.64). The company also reported negative net margins and a negative return on equity, indicating significant financial challenges that may have influenced investor sentiment.