Morgan Stanley picks oil sector winners and losers for Q2

Core Laboratories

09/07/2021 14:15

** Morgan Stanley expects both Schlumberger  SLB.N  and
Halliburton  HAL.N  to reiterate their double-digit y-o-y growth
targets for 2H21
    ** Prefers SLB and HAL over Berkshire  BRKa.N  into
earnings; "we do not see major near-term surprises as likely,
but the prospect for international pricing power remains an
interesting bull case for all three"
    ** Says equipment suppliers have the most upside to
consensus earnings expectations; picks Nov Inc  NOV.N , Tenaris
 TS.n  and Cactus Inc  WHD.N 
    ** See longer-term upside revision potential for NOV,
upgrades to "equal-weight" from "under-weight"; Shares up 3.4%
to $14.66 premarket, set to snap four-day losing run
    ** MS cautious on more-defensive service companies such as
BKR and Core Labs  CLB.N ; cuts CLB to "equal-weight" from
"over-weight" given substantial share price appreciation and
more balanced risk-reward following its rally
    ** CLB up 36% YTD after losing for the last four years
    ** Among asset-heavy small caps, MS constructive on Nextier
Oilfield Solutions  NEX.N  and Patterson-UTI Energy  PTEN.O ,
cautious on Liberty Oilfield  LBRT.N  and Transocean  RIGN.S  
    ** On Friday, U.S. oil and gas stocks rose premarket as data
showing a draw in U.S. inventories lifted crude prices
 O/R  urn:newsml:reuters.com:*:nL3N2OL2ZM
    
    

 (Reporting by Susan Mathew)
 ((susan.mathew@thomsonreuters.com))