Global Hunter Securities Initiates Coverage of the Oil Service Sector (BAS, HAL, BHI, KEG, RES, CPX)

Global Hunter Securities initiated a coverage of the oil service sector. In a research report published today, Global Hunter expressed a very positive outlook on the sector. In the report, Global Hunter states, "We are initiating coverage of the oil service sector with a long-term bullish view of the space. We believe that the current pullback has provided an excellent entry point for the six names we are initiating coverage on: Basic Energy Services (BAS), Baker Hughes (BHI), Complete Production (CPX), Halliburton (HAL), Key Energy (KEG) and RPC (RES)." Global Hunter named Baker Hughes BHI and Key Energy KEG as its favorite picks. In the report, Global Hunter states, "We are initiating BHI with a Buy rating and $97 price target. We favor BHI for its technology suite that, now with the integration of service equipment, will provide for upward top and bottom line growth in excess of its large cap peers. We are initiating KEG with a Buy rating and $24 price target. We favor KEG for its well servicing and coiled tubing business lines based on our above thesis." It has also put a buy rating on Basic Energy Services BAS. Global Hunter states, "BAS has been steadily upgrading its pressure pumping and well servicing assets over the past few years and has a balanced suite of services. Its home deep in the heart of the oil patch (Midland, TX) has allowed for ease of increasing its exposure to oil. We believe that its well servicing business will drive top and bottom line growth in excess of consensus. We are assigning a $36 price target." Global Hunter is less optimistic about RPC, however, as it started its coverage with a Neutral rating. In the report, Global Hunter states, "RES has built a top-tier pressure pumping fleet in the past few years, but it does not have the exposure to the segments we favor compared to our Buy rated names. We assign a $27 price target." Halliburton HAL was given a price target of $60 and Complete Production CPX $38. On Friday, Baker Hughes lost 1.61% of its value to close the week at $69.27. Key Energy had a similar fall, dropping 1.66% to end the week at $15.37. Halliburton lost 1.37% to stand at $46 at the end of the week, while Complete Production lost 1.86% and is currently standing at $29.58. The worst performer was Basic Energy, losing 2.46% to finish the week at $25.74. The only winner on Friday was RPC, which added 0.4% to its value and is currently trading at $22.85.