UPDATE: BMO Capital Markets Reiterates Outperform Rating, Raises PT on Patterson-UTI Energy on Better-Than-Expected Results

In a report published Friday, BMO Capital Markets reiterated its Outperform rating on Patterson-UTI Energy

, and raised its price target from $20.00 to $25.00. BMO Capital Markets noted, “PTEN printed clean EPS of 40c versus our 27c. Consensus was 29c. Overall, the top line was 8% higher than our estimates, led by pressure pumping (PP) and to a lesser extent land drilling. Cost were similar directionally but better margins provided an EBIT that surpassed our expectations by $27mm (38%, +11c/sh). Daily land drilling margins were resilient, falling only $90/d…better than peers HP and likely NBR. PP margins provided the most surprise and actually rose in the quarter (EBITDA margin up 200bp sequentially to 28.7%) on pad efficiency pickups and more 24hr operations. PTEN has also now reactivated all stacked HHP and purchased another 13.5k HHP. Impressive results drove the pop in the stock today, obviously helped some by a short squeeze ( ~16% short interest).” Patterson-UTI Energy closed on Thursday at $22.90.