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Eight oil services stocks cut, Hi-Crush Partners new Best Idea at Guggenheim – Baker Hughes Inc. (NYSE:BHI)

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Guggenheim analysts downgrade eight oil services companies as they cut their 2017 oil price forecast to $48/bbl from $55, saying they do not expect a recovery until H2 2018.

But even as the firm cuts Baker Hughes (NYSE:BHI), Forum Energy Technologies (NYSE:FET), Fairmount Santrol (NYSE:FMSA), Halliburton (NYSE:HAL), Helmerich & Payne (NYSE:HP), Nabors Industries (NYSE:NBR), Schlumberger (NYSE:SLB) and Superior Energy Services (NYSE:SPN) to Neutral from Buy, the firm finds Hi-Crush Partners (NYSE:HCLP) worthy enough to add to its Best Ideas List.

In highlighting HCLP, Guggenheim cites a strong, fundamental backdrop for frac sand; the addition of dedicated Permian basin cash flows; the company’s commitment to re-instating distributions before year-end (it currently trades at a 12% yield to expected 2018 distributions); and valuation.

The firm recommends focusing on “relative value and cash return until growth reaccelerates” in H2 2018,” and it says stocks that fit the bill include HCLP, U.S. Silica (NYSE:SLCA), Weatherford (NYSE:WFT), Patterson-UTI Energy (NASDAQ:PTEN) and TechnipFMC (NYSE:FTI).



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