PDS · Precision Drilling

The thesis

Precision Drilling's rig recovery is real, but its shares already reflect much of it and face no company report until about 11 February 2027, so they are more likely to lag the S&P 500 over the next three months. The fourth-quarter report settles the case. It shows whether U.S. operating margin per day reached the US$9,500–10,500 the company guided for the quarter.

The shares closed at $95.83 on 13 November 2026, up from $91.97 on 10 November 2026. They remain 14.5% below the 52-week intraday high of $112.03 set on 29 October 2026. No company filing or announcement explains either move. The only company-specific item since the results is Piper Sandler's target increase of 3 November 2026.

The business case rests on the 27 October 2026 third-quarter report. Average active rigs rose to 123 from 106 a year earlier, and revenue rose 15.0% to C$531.7 million. U.S. operating margin per day fell to US$7,653 from US$8,700 because restarting idle rigs is costly. The guided step-up to US$9,500–10,500 is a promise until the February report.

Industry activity in the U.S. is flat. Baker Hughes counted 603 U.S. rigs in the week to 16 October 2026 and 604 in the week to 6 November 2026 (SteelOrbis). Further gains for Precision in the U.S. therefore depend on taking share and on pricing, without help from a rising market.

Bullish and bearish views on Precision Drilling Corporation

The bull case on Precision Drilling Corporation (PDS), in brief: analyst target sits above the price. The bear case: third quarter slightly below consensus.

Bull case

• Analyst target sits above the price. Piper Sandler kept an Overweight rating and raised its price target to $115 on 3 November 2026, according to company news.
• U.S. rig count higher than a year ago. Baker Hughes counted 604 active U.S. rigs in the week to 6 November 2026, 56 more than a year earlier, with 463 drilling for oil (SteelOrbis).
• Precision is outgrowing the U.S. industry. Its average U.S. active rigs rose 19% in the third quarter, against a 10% rise for the U.S. industry (27 October 2026 report).
• Canadian winter looks busy. Canada's rig count was 223 in the week to 6 November 2026, 32 more than a year earlier. The company expects its Super Series rigs in Canada to be nearly fully used this winter (27 October 2026 report).
• Debt is falling and buybacks continue. Total debt fell to C$635 million at 30 September 2026 from C$687 million at year-end 2025. Third-quarter buybacks retired 269,331 shares for C$31 million (27 October 2026 report).

Bear case

• Third quarter slightly below consensus. Benzinga reported on 28 October 2026 that earnings per share of US$1.18 missed the US$1.24 estimate and revenue of US$379.9 million missed the US$380.2 million estimate.
• Margins lag volume. Canadian margin per day slipped to C$12,817 from C$13,007 a year earlier. Nine-month net earnings fell to C$37.1 million from C$44.0 million (27 October 2026 report).
• Capital spending raised again. The 2026 capital budget rose to C$275–285 million from C$265 million, for long-lead equipment and a rig upgrade (27 October 2026 report). That leaves less free cash for debt reduction and buybacks.
• U.S. industry count has stalled. The U.S. rig count moved only from 603 in the week to 16 October 2026 to 604 in the week to 6 November 2026 (SteelOrbis). A flat market limits room for higher day rates.
• Tax dispute with the Canada Revenue Agency. A reassessment of the 2018 tax year could create a liability of up to about C$155 million before interest. The company has recognized no liability and plans to contest it (27 October 2026 report).

Price setup

The shares closed at $95.83 on 13 November 2026. On adjusted daily closes that is above the 50-day moving average of $89.40 and the 200-day moving average of $88.81, both as of the same close. The three-month change is 8.1%, measured from the $88.61 close of 17 August 2026.

The year's range is wide. The 52-week closing low was $56.91 on 13 November 2025, and the intraday high was $112.03 on 29 October 2026. The shares gave back much of the late-October gain after the results and have recovered part of it since 10 November 2026.

The moving averages are the levels the case turns on. A sustained move back under the 200-day average would show the market doubting the recovery itself. A return to the late-October closing highs would show buying strong enough to lead the index without a new report.

Across liquid US stocks, the spread of 63-session returns widened to a standard deviation of 27% in 2026 from 15% in 2017. A three-month call on one driller therefore carries a wide range of outcomes in either direction.

Catalysts ahead

• 20 November 2026: Baker Hughes weekly North American rig count, published each week through December. Shows whether the U.S. count breaks out of its 603–604 range and how fast Canada's winter drilling season builds, both of which drive Precision Drilling's active rigs and pricing.
• ~11 February 2027 (est.): Fourth-quarter and full-year 2026 report. Shows whether U.S. margin per day reached the US$9,500–10,500 guidance and whether the C$100 million debt-reduction target for 2026 was met.

What would change the view

A daily close above $107.68, the 29 October 2026 close at the top of the late-October run, would show the shares leading the S&P 500 and prove this call wrong; so would fourth-quarter U.S. margin per day above the US$10,500 top of guidance.

What it trades with

Precision Drilling earns its revenue from rigs working in Canada, the U.S. and a few international markets. That ties the shares to producer drilling budgets, oil prices and western Canadian natural gas prices. The company linked a 146% rise from a year earlier in AECO gas prices, the Alberta benchmark, to the start of LNG Canada (27 October 2026 report).

The company reports in Canadian dollars while its NYSE shares trade in U.S. dollars, so moves in the Canadian dollar change reported results when translated. A common market view is that land drillers trade together with crude oil, so a broad energy sell-off would likely hit the shares alongside other North American drillers such as Helmerich & Payne and Patterson-UTI.