Market Overview

Deutsche Bank's 3 Favorite Oil Service Picks: Patterson-UTI, Halliburton, C&J

Deutsche Bank's 3 Favorite Oil Service Picks: Patterson-UTI, Halliburton, C&J
Related HAL
Q4 13F Roundup: How Buffett, Einhorn, Loeb, And Others Adjusted Their Portfolio
Benzinga's Top Upgrades, Downgrades For January 29, 2018
Tracking George Soros's Portfolio - Q4 2017 Update (Seeking Alpha)
Related PTEN
Patterson-UTI Energy Is Among The Most 'Oversold' Stocks, Analyst Says
Benzinga's Top Upgrades, Downgrades For February 14, 2018
Halliburton sand delivery problems may be widespread, analyst says (Seeking Alpha)

It’s been a great year for the stock market in 2017, with the S&P 500 up 13.7 percent year to date. However, you wouldn’t know it by looking at oil services stocks, which have been hit hard by persistently low oil prices.

On Tuesday, however, Deutsche Bank initiated coverage on 20 oil services stocks, including three stocks that represent its best long-term investment ideas in the space.

According to analyst David Havens, underperforming stocks and downward earnings revisions are signs the market is finally letting go of its hope for a quick rebound in the oil market.

“We are encouraged by the judicious selloff in the stocks year-to-date, and by what also appears to be a market that is acknowledging the obsolescence of the old cyclical playbook,” Havens wrote.

At current prices, Havens sees little downside remaining for the oil services space and didn’t set a single Sell rating among the 20 stocks covered.


Havens said the availability of “tight” U.S. oil supply has changed the cyclical nature of the oil business and made it relatively easy for oil production to quickly adjust to rising prices. In that respect, the top oil services companies will be those that demonstrate innovative business models and specialize in niche technologies, Havens wrote.

Deutsche Bank set Buy ratings on Schlumberger Limited. (NYSE: SLB), Core Laboratories N.V. (NYSE: CLB), Transocean LTD (NYSE: RIG), Weatherford International Plc (NYSE: WFT), Superior Energy Services, Inc. (NYSE: SPN) and Smart Sand Inc (NASDAQ: SND).

However, Havens said domestic U.S. companies with exposure to pressure pumping are best-positioned to recover business in the long term.

Deutsche Bank named Buy-rated Patterson-UTI Energy, Inc. (NASDAQ: PTEN), Halliburton Company (NYSE: HAL) and C&J Energy Services Inc (NYSE: CJ) its top three stock picks in the oil services space.

Disclosure: The author is long HAL and SLB.

Related Link: How The Bear Thesis On Nat Gas Is Playing Out

Latest Ratings for HAL

Jan 2018Atlantic EquitiesUpgradesUnderweightNeutral
Jan 2018GuggenheimUpgradesNeutralBuy
Oct 2017CitigroupMaintainsBuy

View More Analyst Ratings for HAL
View the Latest Analyst Ratings

Posted-In: David HavensAnalyst Color Long Ideas Commodities Initiation Markets Analyst Ratings Trading Ideas Best of Benzinga


Related Articles (CLB + CJ)

View Comments and Join the Discussion!