Market Overview

My goal is to be on stage with my computer and let you
see my screen and make sure you know what buttons to
press, where you’re getting in & out, how to calculate
risk, your targets — all of those things.
It’s real-life trading. Make sure you sign up!
- Jerremy Newsome

Patterson-UTI Energy Is Among The Most 'Oversold' Stocks, Analyst Says

Patterson-UTI Energy Is Among The Most 'Oversold' Stocks, Analyst Says

Patterson-UTI Energy, Inc. (NASDAQ: PTEN) has seen its stock fall about 15 percent in reaction to its fourth quarter results, which prompted one Wall Street analyst to encourage investors buy the dip.

The Analyst

BMO Capital Markets' Daniel Boyd upgraded Patterson-UTI Energy's stock from Market Perform to Outperform with an unchanged $24 price target.

The Thesis

Patterson-UTI Energy reported earnings Feb. 8, which included a bigger-than-expected quarterly loss. The company's fundamentals are improving, and management's commentary of adding up to 200 rigs at year-end compared to 2017 implies the potential for upside to consensus estimates in the bottom half of 2018.

The earnings report wasn't accompanied with a dividend increase and capex expectations moved higher, Boyd said. While both of these factors were "disappointing," it didn't warrant such an excessive selloff. The company's free cash flow yield for 2018 is estimated to be 3.7 percent, which would rank it as one of the highest within the land-drilling space and could prompt a 50 percent dividend increase in the future.

Patterson-UTI Energy's stock is trading at a 5.4 times multiple on 2018E EBITDA, which implies a 20 percent discount to replacement value of currently working as opposed to peers like Helmerich & Payne, Inc. (NYSE: HP) whose stock is trading at a premium of up to 40 percent.

Price Action

Shares of Patterson-UTI Energy were trading higher by 2 percent at $18.14.

Related Links:

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

Patterson-UTI Energy: Recent Weakness Reveals Relative Opportunity

Latest Ratings for PTEN

Apr 2019MaintainsBuyBuy
Mar 2019Initiates Coverage OnNeutral
Jan 2019DowngradesOverweightNeutral

View More Analyst Ratings for PTEN
View the Latest Analyst Ratings

Posted-In: BMO Capital Markets Daniel Boyd Oil oil rigsAnalyst Color Upgrades Analyst Ratings Best of Benzinga


Related Articles (PTEN + HP)

View Comments and Join the Discussion!

Latest Ratings

FRPTInitiates Coverage On60.0
NOMDInitiates Coverage On26.0
SMPLInitiates Coverage On27.0
TWNKInitiates Coverage On16.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Study: NBA Jersey Sponsorships Drive $350 Million In Value On Social Media Alone

In Numbers And Narrative, Uber's Q4 Suggests A Recovery