Momentum in energy services cos to continue as oil prices rise - ATB Capital Markets

STEP Energy Services

06/01/2021 16:53

** ATB Capital Markets raises rating on Canada-based
oilfield services co Step Energy  STEP.TO  to "outperform" from
"sector perform" and Calfrac  CFW.TO  to "sector perform" from
"underperform"
    ** Says energy services stocks have rebounded strongly since
their mid-March bottom, and brokerage sees further positive
momentum
    ** Says key energy service catalysts include strength in oil
prices, sequential increases in rig activity in North America
and positive earnings revisions
    ** Brokerage's "top ideas" for 2021 are Schlumberger  SLB.N 
for the large caps, and Helmerich & Payne  HP.N  as well as
Precision Drilling  PD.TO  for the SMIDs
    ** Unlike the prior cycles, brokerage expects international
activity to respond quicker to increases in oil demand/prices
    ** Says improving activity levels in Canada and the U.S. are
providing STEP with a strong tailwind, which the Street has not
fully appreciated
    ** Adds that CFW was the worst performing stock in its
coverage in 2020 but following recapitalization transaction, the
worst is over for the stock
    ** Expects Canada upstream spending to increase y/y by
low-to-mid single-digit percentage in 2021

 (Reporting by Arundhati Sarkar in Bengaluru)
 ((Arundhati.Sarkar@thomsonreuters.com;
twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))