Noble Corporation plc (NE): what the price assumes
In the published model solve dated 2026-Q2, anchored at $39.90, Noble Corporation plc (NE) is priced for +19.9% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/NE
Headline
| Field | Value |
|---|---|
| Ticker | NE |
| Company | Noble Corporation plc |
| Current price | $39.90/sh |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 3.3% |
| Operating margin today | 11.4% |
| Margin compression (value-band) | -8.1pp |
| Implied growth | 19.9% |
| Multiple paid | 23x operating income |
The operating-margin figure is value-band context at year 5: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 9.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.3pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| cohort percentile (of 46 peers) | 74 |
| sustained it ~5 years at this level | 43% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by earnings-power and growth-DCF value, while asset-based/relative-multiple land below the price. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 5.20x | 4 | expensive |
| Earnings | 1.15x | 4 | expensive |
| Relative | 2.40x | 3 | expensive |
| Growth | 0.99x | 4 | justifies |
Families that justify the price: Earnings, Growth Families that call it expensive: Asset, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $48.39 | 0.82x | yes | FCF base $0.9B, growth -10% (input: historical growth), terminal g 0.5%, WACC 7.5%, 5yr projection |
| DCF Exit Multiple | Growth | $51.10 | 0.78x | yes | Exit EV/EBITDA: 17.4x / 22.4x / 27.4x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $16.63 | 2.40x | yes | P/E 19.77x (blended: static sector reference 10x + trailing (TTM) 43x), scenarios: 14.8x / 19.8x / 23.7x (bear / base = reference held flat / bull), EV/EBITDA 10.91x |
| Simple DDM | Growth | $34.83 | 1.15x | yes | DPS $1.99, g=3.3% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $0.54 | 73.89x | yes | Stage 1: -77% for 5yr, Stage 2: 3.5% perpetual (excluded from median) |
| Simple Excess Return | Asset | $10.13 | 3.94x | yes | BV/sh $28.10, ROE (TTM) 3.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $6.18 | 6.46x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $17.86 | 2.23x | yes | Rev $3.1B, growth -11% (input: historical growth; tapered), Terminal P/S: 1.6x / 2.1x / 2.5x (bear / base = today's held flat / bull, cap 6x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $26.90 | 1.48x | yes | Normalized EBIT (4y avg op income, one-time charges added back) $0.54B × (1−21%) / WACC 7.5% → EPV (no growth) |
| Residual Income | Asset | $4.63 | 8.62x | yes | BV $28.10 + 5yr PV of (ROE (TTM) 3.3% − Kₑ 9.3%) × BV; BV grows 2.2%/yr |
| Graham Number | Asset | $24.25 | 1.65x | yes | √(22.5 × EPS $0.93 × BVPS $28.10) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $4.14 | 9.64x | yes | EBITDA $0.35B × sector EV/EBITDA 6.0x |
| FCF Yield | Earnings | $50.76 | 0.79x | yes | FCF $881.7M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $48.37 | 0.82x | yes | SBC-adj FCF $0.85B (FCF $0.88B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $0.78 | 51.15x | yes | EPS $0.93 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $1.53 | 26.08x | yes | BV $28.10 × (ROIC 0.4% / WACC 7.5%) (excluded from median) |
| P/Sales Sector | Relative | $23.07 | 1.73x | yes | Revenue $3.07B × sector P/S 1.2x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $10.05 | 3.97x | yes | EPS $0.93 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Contract Drilling Services | operating | enterprise | 3.3B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $1.5b |
| Net debt / NOPAT (after-tax) | 5.27x |
| Net debt / operating income (pre-tax) | 4.16x |
| Interest coverage | 2.2x |
| Share count CAGR (dilution) | 17.9% |
| Burning cash | no |
Bullet Takeaways
Noble Corporation is an offshore drilling contractor, a mature, deeply cyclical business whose numbers should be read against where the oil cycle sits rather than as a steady trend. At $41.64 (June 27, 2026) the price pays about 13x company-wide operating income, which implies operating growth of roughly 4% per year for five years, a modest bar.
The most recent quarter was strong: contract drilling revenue of $743 million, net income of $121 million, adjusted EBITDA of $277 million, and a backlog of about $7.5 billion that gives unusual visibility for a cyclical. The static valuation families call the asset and peer-multiple views rich, while only the forward growth method reaches the price.
The variable with the most leverage is the oil price, because it drives offshore exploration budgets and therefore rig demand and dayrates. Net debt is about $1.3 billion with interest coverage near 2.8x, so the balance sheet is serviceable but not immune if the cycle turns.
Bull Case
Noble is a mature offshore driller, and the stage matters because it tells you to read these numbers as a cyclical recovery rather than a secular ramp. The cycle is currently working in Noble's favor, and the backlog is the proof. As of late April the company reported about $7.5 billion of backlog, having added roughly five rig-years of new floater work since the prior quarter, and Tier-1 drillship dayrates had firmed into the low-to-mid $400,000s. For a cyclical, a multi-year backlog at rising dayrates is the closest thing to forward visibility, and it converts a volatile day-rate business into something with contracted cash flows.
The quarter showed the operating leverage that makes the cycle so powerful. Contract drilling revenue rose to $743 million from $705 million, net income was $121 million with diluted EPS of $0.75, and adjusted EBITDA reached $277 million, as marketed-floater contracted utilization improved to 68% from 62%. When a driller raises utilization and dayrates at the same time, margins expand fast because the cost of running a rig is largely fixed. Management maintained full-year 2026 guidance of $2.8 to $3.0 billion in revenue and $940 million to $1.02 billion of adjusted EBITDA, and free cash flow surged in the period.
The customer base anchors the durability. The filing shows backlog concentrated among the strongest counterparties in energy: ExxonMobil at about 23.7%, Shell at 19.5%, BP at 16.2%, and TotalEnergies at 12.6% (FY2025 10-K, accession 0001895262-26-000076). These are the majors most committed to long-cycle offshore projects, which tend to proceed once sanctioned regardless of short-term price swings. With the price implying only about 4% growth, an undemanding bar, and a backlog and customer set that support it, the bull case is that a mid-cycle driller is priced conservatively for the recovery it is already delivering.
Bear Case
The single variable that decides Noble's fate is the oil price, and the current quote does not appear to respect how much leverage it has over the thesis. Offshore drilling demand is a derivative of the majors' exploration and development budgets, which are themselves a derivative of oil prices and of confidence in long-cycle returns. The filing is explicit that macro forces, including geopolitical conflict, tariffs, and persistent inflationary and supply-chain pressures, have the ability to negatively impact rig demand and to raise the cost of services (FY2025 10-K, accession 0001895262-26-000076). A sustained drop in oil prices would slow new contract awards, pressure the dayrates that are currently firming, and turn the backlog from a tailwind into a backward-looking reminder of better conditions, and none of that is reflected in a price that implies steady growth.
The cyclical signals are already mixed beneath the strong headline. Utilization of Noble's five ultra-harsh jackups fell to 66% in the quarter from 72% the prior period, a reminder that not every part of the fleet is tightening, and offshore is a market where idle rigs burn cash. Concentration is the other edge of the customer story: with ExxonMobil, Shell, BP, and TotalEnergies together representing roughly 72% of backlog, a budget cut or a project deferral at even one or two of them would carve a large hole in contracted revenue.
The valuation leaves little protection if the cycle rolls. The asset-based and peer-multiple frames both call the stock expensive, and only the forward growth-DCF reaches the price, which means the premium rests on the recovery continuing. In a commodity-driven business, the moment to be most cautious is when results are strongest and the cycle looks most durable, because that is typically when dayrates and utilization are near their peak. The bear case is straightforward: the price embeds a continuation of favorable conditions, but the one external variable that controls those conditions, the oil price, sits entirely outside the company's control.
Valuation
At the current price the market is paying about 13x company-wide operating income, which implies operating growth of roughly 4.2% per year over a five-year stage. The solve runs at a cost of capital near 9.3% with 4% terminal growth, and each point of cost of capital moves the implied growth by about 5.8 points, so the inversion is sensitive to the discount rate. Keep the figure approximate; it is a single solve, and for a cyclical the bigger caveat is that the operating-income base itself moves with the cycle.
The family pattern shows a recovery premium. The asset-based and relative-multiple methods both read expensive, and only the forward growth-DCF reaches the price. For a driller, the asset view marking the stock expensive is meaningful, because the rigs are the company's value and the market is paying above their conservative worth on the strength of the upcycle. The reverse-DCF range centers below the current price with an acceptable reliability flag, consistent with the methods pricing a normalized cycle while the quote leans on the favorable current one.
The judgment turns on where in the cycle you think Noble sits. The roughly 4% implied growth is modest in absolute terms, but for a cyclical that figure is fragile because the earnings it grows from are near a recovery high. If dayrates and utilization hold or climb, the price is reasonable; if the oil cycle turns, the operating income base falls and the same 13x multiple applies to a smaller number. The $7.5 billion backlog provides a real buffer of contracted revenue, but it does not insulate the equity from a re-rating if forward demand weakens.
Catalysts
The most recent print, Q1 2026 (reported late April 2026), was strong: contract drilling revenue of $743 million, up from $705 million the prior quarter, net income of $121 million, diluted EPS of $0.75, and adjusted EBITDA of $277 million, with free cash flow surging. Marketed-floater contracted utilization improved to 68% from 62%, Tier-1 drillship dayrates firmed into the low-to-mid $400,000s, and backlog reached about $7.5 billion after roughly five rig-years of new floater awards. Management maintained full-year 2026 guidance of $2.8 to $3.0 billion in revenue and $940 million to $1.02 billion of adjusted EBITDA.
The forward catalysts are new contract awards and dayrate fixtures, since each fresh floater contract extends the backlog and resets the rate environment, and the pace of offshore project sanctioning by the majors. Jackup utilization, which slipped to 66% from 72%, is a secondary signal worth tracking for the harsh-environment segment.
The dominant watch item is the oil price and the majors' offshore capital budgets, which drive the entire demand picture. Customer concentration adds sensitivity, with ExxonMobil, Shell, BP, and TotalEnergies together making up the large majority of backlog. Continued contracting at firm dayrates would confirm the upcycle; a drop in oil prices or a deferral at a key customer would be the clearest negative catalyst. Sources: Noble Corporation Q1 2026 results and guidance (prnewswire.com; stocktitan.net; investing.com; brazilenergyinsight.com), April 2026.
Peer Cohorts (Per Segment, With Filing Citations)
Contract Drilling Services (reported)
- RIG (Transocean Ltd.)
- FY2025 10-K: …of reliability, operational efficiency and sustainability. Drilling Contracts Overview -Our drilling services contracts are individually negotiated and vary in their terms and conditions. We obtain most of our drilling contracts through bidding processes in competition against other drilling services contractors and…
- FY2025 10-K: …contract, and (iii) delivering the drilling rig by mobilizing to and demobilizing from the drill location. For most of our contracts with customers, our drilling services represent a single performance obligation that is satisfied over time, the duration of which varies by contract. As of December 31, 2025, the…
- SDRL (SEADRILL Ltd)
- FY2025 10-K: …operational track record and the quality and reliability of our assets. Our customers include oil super-majors, state-owned national oil companies and independent oil and gas companies. 6 Drilling units The following table provides certain specifications and the location of our drilling units as of December 31, 2025…
- FY2025 10-K: 2 - Accounting policies Revenue from contracts with customers The activities that primarily drive the revenue earned from our drilling contracts include (i) providing a drilling unit and the crew and supplies necessary to operate the rig, (ii) mobilizing and demobilizing the rig to and from the drill site and (iii)…
- PTEN (PATTERSON UTI ENERGY INC)
- FY2025 10-K: …and necessary maintenance expenses. Most drilling contracts are subject to termination by the customer on short notice and may or may not contain provisions for an early termination payment to us in the event that the contract is terminated by the customer. Our drilling contracts provide for payment on a daywork…
- FY2025 10-K: …statements in Item 8 of this Report for a description of our calculation of backlog. Our contract drilling backlog may continue to decline, as fixed-term drilling contract coverage over time may not be offset by new contracts or may be reduced by price adjustments to existing contracts, including as a result of a…
- HP (Helmerich & Payne, Inc.)
- FY2025 10-K: …In the United States, we compete with Nabors Industries Ltd., Patterson-UTI Energy, Inc., Precision Drilling Corporation, and many other competitors with regional operations. Internationally, we compete directly with various contractors at each location where we operate. In the Gulf of America platform rig market, we…
- FY2025 10-K: …of the contract, and the competitive forces of the market. These drilling services, including our technology solutions, represent a series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Because our customers benefit equally throughout the service period…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.