Citigroup lowers PT on US-based oilfield service companies

Cactus

05/05/2025 13:35

** Citigroup says besides tariffs, the key question for oilfield service cos this earnings season has been the outlook for industry fundamentals in light of deflating crude prices

** "Public E&Ps have largely shifted their investment strategies toward maintenance plus growth fueled by efficiency gains in an effort to maximize free cash flow" - brokerage

** Adds that if current conditions hold, about 75 oil rigs are expected to cease operation or nearly 15% of domestic oil drilling

** Expects gas activity to pick up in 2H25 to moderate the decline but some may not be deployed until late in the year

** Brokerage sees risk of margin compression from reduced operating leverage and modestly lower prices

Brokerage cuts price target on the following companies:

Company
New PT
Old PT
Upside to stock's last close
Halliburton HAL.N
$29
$31
40.8%
SLB SLB.N
$47
$48
35.3%
ProPetro Holding PUMP.N
$6.50
$10
18%
Patterson-UTI Energy PTEN.O
$8
$10
32.7%
ChampionX CHX.O
$35
$40
38.7%
Cactus Inc WHD.N
$45
$50
9.8%

(Reporting by Pooja Menon in Bengaluru)

((Pooja.Menon@thomsonreuters.com;))