BofA Global Research is optimistic on Adnoc Drilling (ADX:ADNOCDRILL) amid the United Arab Emirates' plans to boost its oil production capacity over the medium term.
"ADNOC Drilling delivered another inline quarter and reiterated its 2026E guidance despite ongoing regional conflict. However, the earnings call was dominated by questions around the company's medium-term growth outlook, particularly if UAE increases its oil production capacity to 6mb/d. While management refrained from providing explicit targets, we believe such a scenario is likely to be incorporated into 2027-31 business plan," analysts said Tuesday. "In parallel, the second phase of the unconventional is also likely to be announced in the coming months, given that progress on Phase 1 is ahead of schedule and key project risks have largely been de-risked."
As such, the price objective was bumped up to 6.90 Emirati dirhams from 6.80 dirhams, with an unchanged buy rating on the stock.
In terms of earnings forecasts, the research firm raised its projected EPS for the drilling company by 3% for 2026, 5% for 2027 and 4% for 2028. Sales and EBITDA estimates over the three-year period were also upwardly adjusted.