Bernstein Initiates Coverage On 9 Oil Field Service Stocks

The OPEC deal may have finally marked a buying opportunity in oilfield service stocks after a multi-year slump in the global oil market. Bernstein analyst Colin Davies now has a positive outlook for North American oil field services stocks and has initiated coverage on nine of the biggest names in the space. According to Davies, stock selection remains important. He sees the recovery playing out in two distinct phases.

Stock Selection And Recovery

“We believe the recovery will spread more rapidly than consensus, beyond the favored plays such as Permian, to shallow/mid water and near field environments and eventually deepwater,” he explained.

Bernstein is bullish on oil prices following the OPEC production cut and is calling for Brent crude to reach $60/bbl by Q3 2017, $70/bbl by 2018 and $80/bbl by 2019.

9 In Focus

The firm has initiated the following ratings and price targets:

• Baker Hughes Incorporated BHI: Market Perform, price target $65.
• ENSCO PLC ESV: Outperform, price target $12.50.
• Halliburton Company HAL: Outperform, price target $64.
• Helmerich & Payne, Inc. HP: Market Perform, price target $87.
• Nabors Industries Ltd. NBR: Outperform, price target $19.50.
• Noble Corporation Ordinary Shares (UK) NE: Market Perform, price target $6.50.
• Schlumberger Limited. SLB: Market Perform, price target $92.
• Transocean Ltd RIG: Outperform, price target $15.50.
• Weatherford International Plc WFT: Outperform, price target $7.

Disclosure: The author is long HAL, SLB and BHI.