Morningstar Rating

Stock Research and Analysis

by Stephen Ellis

Bulls Say

We expect an average of 25-30 deep-water rigs to be delivered annually for the next few years, versus just three or four new rigs per year historically.
NOV's distribution segment (one of the world's largest oilfield distributers) is an overlooked gem, in our view. The recent Wilson and CE Franklin deals increase National Oilwell Varco's purchasing power with suppliers while strengthening switching costs with customers through tighter integration.
National Oilwell Varco's recent introduction of a harsh-environment FPSO design is a major step forward for its FPSO ambitions. Read more 

Bears Say

There is about $14.3 billion worth of goodwill and intangibles on the balance sheet. If management overpays for deals, the firm could take write-downs.
Petrobras has decided to cap the number of floaters it uses at 42 in 2014 versus 41 in 2013. This means that National Oilwell Varco is unlikely to win any replacement work for the estimated 28% of its backlog that is from Petrobras.
Cameron recently won its first complete deep-water equipment package after acquiring TTS Energy in 2012. It is now a more dangerous competitor for deep-water work. Read more 

Management

CEO Merrill (Pete) Miller Jr. has led National Oilwell Varco since 2001 and is Morningstar's 2012 CEO of the Year. In late 2012, Miller stepped back from the day-to-day operations of NOV in preparation for his eventual retirement. After orchestrating   Read more 

Profile

National Oilwell Varco is one of the largest equipment suppliers in the drilling industry. It provides a comprehensive line of equipment for rigs and consumable products   Read more 

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What We Can Expect From Second-Quarter Earnings  
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