Nabors Industries Ltd. (NYSE: NBR) has seen its shares slaughtered of late, along with many other rig and drilling companies. Some analysts still have positive ratings and big upside price targets on the stock (and on its peers), but the news flow has gone against this industry. So what happens when you see a fresh analyst report that calls for upside in a new call rather than in an old call that simply is justifying the rating?

The independent research firm Argus gave Nabors a big nod on Friday in a new call, raising its rating to Buy from Hold with a $30 price target. Shares have fallen to Thursday’s close of $18.99 about 37% from its high in July $30.24. However, Argus sees a big upside with Nabors.

Argus would argue that the recent pullback in Nabors shares, driven by the sharp fall in oil prices since early June and concerns about a potential drilling slowdown, has provided investors with a favorable entry point.

Earnings going forward are expected to be boosted due to strength in the onshore drilling market, as well as the firm’s construction of high-spec PACE-X rigs.

Nabors has an active fleet, including newbuilds, of 526 rigs, and the average fleet utilization rate was 72% during the third quarter.

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Argus stated in its report:

On October 21, Nabors reported 3Q14 adjusted net income from continuing operations of $116.7 million or $0.39 per share, up from $68.3 million or $0.20 per share in the prior-year period and $73.5 million or $0.24 per share in 2Q14. Adjusted EPS beat the consensus estimate by $0.03, but missed our estimate by $0.02. Third-quarter operating revenue rose 16.9% year-over-year and 12% sequentially to $1.81 billion. Adjusted EBITDA rose 11.5% year-over-year and 17.7% sequentially to $490.0 million.

The third-quarter earnings reflected sequential improvement in all of the company’s main businesses except for Production Services.

In the third quarter, the Drilling & Rig Services segment posted adjusted operating income of $188.3 million, up 26% from the prior quarter. The sequential increase was driven by the company’s largest geographic segment, the U.S. Lower 48, where results benefited from higher utilization, price increases, and the addition of four working rigs.

On the third-quarter call, Nabors’ management said that the outlook for most of the company’s businesses remains favorable in the near to medium term.

In June, Nabors announced that it had entered into an agreement to combine its Completion and Production Services businesses in the United States and Canada with C&J Energy Services, an independent oilfield company. The transaction is expected to close by the end of the year, and Nabors will receive $937 million and own approximately 53% of the combined company. C&J will manage the new company.

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This deal will improve Nabors financial flexibility, as well as allowing it to focus on the drilling business, while still retaining a significant stake in the completion and production services business.

Shares of Nabors traded down around 3% at $18.31 early Friday. The consensus analyst price target is $27.89 and the 52-week trading range is $15.32 to $30.24. Nabors has a market cap of about $5 billion.

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