Oilfield: BofA tempers forecasts, ratings to balance recession risk

Nextier Oilfield Solutions

15/07/2022 18:20

(Adds forecasts, ratings changes, brokerage's comments)
    ** BofA changes outlook, ratings and top picks for oilfield
services sector, expecting a mild U.S. recession and citing
growing concerns over a synchronized global recession
    ** "We are tempering our 2023 outlook, which now reflects a
2023 Brent curve that's down 18% from $104 peak," BofA says
    ** BofA believes that U.S. onshore exploration and
production capex remains more sensitive to falling oil prices,
with land drillers/pumpers likely to see the most downside risk
to estimates in a recession
    ** It forecasts positive Q3 for pumpers globally and land
drillers in the U.S. due to easing supply chain and cost
inflation 
    ** It warns, though, about Russian exposure and intensifying
European energy crisis risk weighing on Q2/Q3 results 
    ** BofA upgrades TechnipFMC PLC  FTI.N  and ChampionX Corp
 CHX.O  to "buy" rating from "neutral" and cuts U.S. land
drillers Patterson-UTI Energy  PTEN.O , NexTier Oilfield
Solutions  NEX.N  and ProFrac  PFHC.O  to "neutral" from "buy"
    ** BofA removes Halliburton Co  HAL.N  ("buy") from its U.S.
1 list — a collection of its best investment ideas drawn from
"buy"-rated and U.S.-listed stocks
    ** Instead, it adds rival Schlumberger  SLB.N  and renews
Thermo Fisher Scientific  TMO.N  for a new term after having it
on the list for a year
    ** The following are analysts' recommendations, according to
Refinitiv:
    
 Company  "Buy" or  "Hold"   "Sell"   Median
           higher           or lower    PT
   HAL       22       4        1       $45 
   SLB       27       4        -       $50 
   TMO       22       2        1      $665 
   FTI    17        7       -          $10
 PTEN     9         6       -         $21
 CHX      8         1       -         $30
 NEX      8         3       -         $15
 PFHC     6         1       -         $28.50
 
 (Reporting by Ruhi Soni in Bengaluru, additional reporting by
Dina Kartit in Gdansk)
 ((Ruhi.Soni@thomsonreuters.com
Twitter: https://twitter.com/ruhithere))