BofA Upgrades Patterson-UTI Energy After Q3 Beat

Patterson-UTI Energy, Inc. PTEN reported an earnings beat for the third quarter, while six of the 10 oilfield service (OFS) companies covered missed expectations, according to BofA Securities.

The Patterson-UTI Energy Analyst: Chase Mulvehill upgraded the rating for Patterson-UTI Energy from Underperform to Buy, while raising the price target from $9.25 to $10.50.

The Patterson-UTI Energy Thesis: While “rig fundamentals are set to tighten materially in 2022,” the company’s stock has declined by more than 20 percent “since hitting a post-COVID high back in June,” Mulvehill said in the upgrade note.

“Macro set-up gives PTEN confidence in net pricing gains,” the analyst wrote. “Mgmt. highlighted strong demand for rig-based technologies to support customers in meeting their goals of reducing emissions,” he added.

“Incorporating mgmt.’s segment outlooks, we change our 4Q21, 2021, 2022, and 2023 EBITDA estimates by 2%, 6%, 8% and 13% to $61mm, $180mm, $397mm and $553mm, respectively. Our estimates are now 2%, 4%, 10%, and 16% relative to consensus,” Mulvehill further mentioned in the note.

PTEN Price Action: Shares of Patterson-UTI Energy had risen by 1.07% to $8.94 at the time of publication Tuesday.

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