Oil field services: Earnings crunch priced in - Berenberg

SBO AG

26/03/2020 07:59

** Berenberg says negative earnings revisions for the oil
field services sector are already reflected in current valuation
following an average share price slump by 53% this year
    ** It upgrades TechnipFMC  FTI.N   FTI.PA  and Subsea 7
 SUBC.OL  to "buy" from "hold", saying both companies have net
cash on the balance sheet and a backlog that will provide some
earnings cushion through 2020
    ** It keeps its "buy" ratings on Wood  WG.L  and Saipem
 SPMI.MI , saying the market has already priced in a possible
re-basing of Wood's dividend and citing Saipem's expanded
backlog and improved execution
    ** Berenberg retains "hold" ratings on Hunting  HTG.L ,
Petrofac  PFC.L  and Schoeller-Bleckmann  SBOE.VI 
    ** It expects U.S. onshore to be hardest hit by the current
downturn - squeezing especially Hunting's margins - as it is
highly sensitive to changes in oil price and is short cycle,
allowing operators to react quickly to the environment
    ** Offshore activity will meanwhile likely see more modest
declines as it is longer cycle and requires greater planning
    

 ((maria.sheahan@thomsonreuters.com))