Precision Drilling (PDS) Stock Forecast & Price Target

Precision Drilling Corp is experiencing operational growth, with an increase in rigs working, particularly within the Montney region, which is expected to bolster its overall performance. The company has adjusted its gross margin expectations upward by 3% for 2026, alongside a 2% increase in estimated EBITDA for the years 2025 to 2027, indicating strong financial health and projections. Furthermore, improvements in the balance sheet, increased visibility in the U.S. market, and a diversified international presence provide significant growth potential and opportunities for multiple expansions.

Precision Drilling Corp faces significant challenges that contribute to a negative outlook for its stock, primarily due to a failure to meet overall activity level forecasts and a lack of high-spec rig utilization in the U.S. Additionally, the company’s inability to generate free cash flow (FCF) to reduce debt exacerbates its financial position, further compounded by weaker oil prices that are reducing demand for oil-directed drilling services. Expectations for Q3 indicate an average of 65 working rigs, a decrease of 7 year-over-year, alongside declining rig margins, which pose additional risks to the company’s revenue and profitability outlook.