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Helmerich & Payne (NYSE:HP) -3.3% and ChampionX (CHX) -1.2% in Monday’s trading as Piper Sandler downgraded both oilfield services names to Neutral from Overweight, labeling U.S. land drilling a “slow- to no-growth market,” with little likelihood of meaningful potential growth.
Discipline across the oilfield services sector (OIH) has been outstanding, with restrained capital spending and disciplined pricing, but valuations are in the correct range for most, Piper’s Ryan Todd said, seeing 2024 as a likely year of value recognition rather than upward estimate revisions.
While the international offshore cycle is still very healthy, the analyst believes expectations should orient around a 10%-15% compound annual growth rate over the next few years compared to some market expectations that saw a potential 15%-20%.
Piper’s current favorites in the oilfield services group are Schlumberger (SLB), Tenaris (TS), Weatherford (WFRD), Liberty Energy (LBRT) and TechnipFMC (FTI).
