NEW YORK--(BUSINESS WIRE)--
In a series of reports published today on the US Oil Services and Drilling industry, Barclays advises investors to view differently the ‘Big Four’: Halliburton, Schlumberger, Baker Hughes and Weatherford.
“While the stock market tends to view these four companies as similar, we believe the opposite,” said James West, Senior Equity Research Analyst for the US Oil Services and Drilling industry. “These companies are highly differentiated, with unique strategies and skill sets, and as such we believe that investors should view each company as a discrete investment opportunity.”
“Detailed analysis, like this series of reports, is the cornerstone of a high quality research department,” said Stu Linde, Head of Equity Research. “James’ series of reports combines his industry expertise with practical investment insights, and is an example of how sell-side research becomes a ‘must-read’ for investors in a given industry.”
Spanning more than 400 pages, the five reports published today provide a detailed analysis of each company’s history and culture, as well as product line exposure. This has enabled Barclays’ team to define each company’s respective ability to benefit from various points in the oil well lifecycle. Key differentiators identified by Barclays include:
- Halliburton: viewed by most investors as a large-cap investment for the potential recovery in North America, the company is the fastest growing in the international arena and differentiates itself through its ability to drive efficiencies across its products and services
- Schlumberger: the most forward thinking of the Big Four, is the industry’s technology leader, having maintained a research and development budget that exceeds the other three combined
- Baker Hughes: fast becoming a global services company, has a rich history of product development and distinctive strengths in several production-oriented business lines, such as production chemicals and industry leading artificial lift technology
- Weatherford: the youngest of the four, the industry’s ‘dark horse’ maintains an unmatched skill-set in well constructions and largely limits its exposure to land and niche off-shore markets, making it the most differentiated of the Big Four.
Barclays projects that 2013 will be the year of the large-cap diversified oil services and drilling companies, with total international revenue for the Big Four set to grow by over 43% to nearly $84 billion in 2015. While Barclays recommends investing in each of the Big Four, the report favors Halliburton and Schlumberger.
“The Big Four will each drive the industry’s growth through a unique combination of skill sets. Investors should therefore adopt distinct investment theses in order to capture the full potential for value creation across the sector,” added Mr. West.
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