Four oil service stocks upgraded at BofA with sector recovery seen


Bank of America upgrades four oilfield service companies led by Helmerich & Payne (HP +8%) on potential for a 2021 recovery after the group remains down 58% YTD and nearly 80% from the beginning of 2018.

BofA analyst Chase Mulvehill ups HP, Liberty Oilfield Services (LBRT +5.4%) and Helix Energy (HLX +6.5%) to Buy and Cactus (WHD +5.7%) to Neutral, with respective stock price targets of $23, $7.50, $4 and $21.

“Our less cautious view of the sector comes on the heels of a less dire outlook for global oil inventories during 2021, thus setting up for less aggressive U.S. shale production declines that likely leads to a doubling of U.S. rig activity” by year-end 2021, Mulvehill writes.

The analyst also reiterates a Buy rating on Baker Hughes (BKR -0.5%) and raises his price target to $21 from $17, saying the company is the only oil services stock with the potential to return to prior cycle peak EBITDA.

ETF: OIH





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