Citigroup lowers PT on US-based oilfield service companies
Citigroup says besides tariffs, the key question for oilfield service cos this earnings season has been the outlook for industry fundamentals in light of deflating crude prices
"Public E&Ps have largely shifted their investment strategies toward maintenance plus growth fueled by efficiency gains in an effort to maximize free cash flow" - brokerage
Adds that if current conditions hold, about 75 oil rigs are expected to cease operation or nearly 15% of domestic oil drilling
Expects gas activity to pick up in 2H25 to moderate the decline but some may not be deployed until late in the year
Brokerage sees risk of margin compression from reduced operating leverage and modestly lower prices
Brokerage cuts price target on the following companies:
Company | New PT | Old PT | Upside to stock's last close |
Halliburton HAL.N | $29 | $31 | 40.8% |
SLB SLB.N | $47 | $48 | 35.3% |
ProPetro Holding PUMP.N | $6.50 | $10 | 18% |
Patterson-UTI Energy PTEN.O | $8 | $10 | 32.7% |
ChampionX CHX.O | $35 | $40 | 38.7% |
Cactus Inc WHD.N | $45 | $50 | 9.8% |
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