National Energy Services Reunited: 2Q26 Post Mortem and Model Update: Turning Crisis Into Opportunity and the OFS Print of the Season

Research evidence excerpt

J P M O R G A N

North America Equity Research

11 August 2026

National Energy Services

Reunited

2Q26 Post Mortem and Model Update: Turning Crisis

Into Opportunity and the OFS Print of the Season

Overweight

NESR, NESR US

Price (10 Aug 26):$35.79

▲Price Target (Dec-26):$41.00

Prior (Dec-26):$31.00

JPM View: NESR achieved a key long-term milestone by delivering annualized

revenue above $2bn per annum, but it doesn’t plan to rest on its laurels. NESR

shares surged 23.3%, outpacing the OSX Index by 1748bps in one of the strongest

trading sessions for the energy sector on a YTD basis. The significant move in the

stock not only reflected the +12%/+17% 2Q26 EBITDA beats, but favorable

outlook commentary, which provided further market confidence that the company

could achieve its 3-by-3 (3B3) growth target of $3bn of revenue within 3 years, or

2029, at accretive margins. In November 2025, the company began its multi-billion

unconventional services award at Jafurah, which has been a significant driver of

top line growth, but one lingering question from investors is whether NESR could

deliver attractive margins from this award, particularly given some of the

disruption caused by the Middle East conflict. We think the strong move in the

shares also reflected the company’s ability to match the Street outlook for EBITDA

margins just above 20% (20.4%), while providing constructive guidance for

margins to grow in 3Q and still match 2025 levels despite some of the headwinds

associated with the conflict (higher freight, logistics, and supply chain costs). In

other words, the print helped to de-risk the go forward margin profile. On the call,

NESR highlighted the 3 key pillars of its strategy to support the achievement of its

$3bn revenue target: 1) winning its “fair share” of the significant $3-$4bn nearterm MENA tender pipeline (“fueling the funnel”), 2) boosting its list of anchor

countries (i.e., Syria), and 3) achieving new frontiers for growth from its

technology portfolio (NEDA, ROYA). The commercialization of technologies

such as MWD, LWD, RSS, and minerals recovery/decarbonization has the

potential to drive $200mm to $300mm of incremental top line growth over the

…