Oil drilling company Patterson-UTI Energy Inc. (NASDAQ: PTEN)'s stock has fallen 30 percent in recent months.
Credit Suisse analyst James Wicklund upgraded Patterson-UTI from Neutral to Outperform and lowered the price target from $22 to $19.
Seaport Global analyst Mike Urban upgraded the stock from Neutral to Buy rating and decreased the price target from $26 to $20.
Credit Suisse's Wicklund said he remains cautious about pressure pumping demand growth and basin issues over the next few quarters, considering the company has underperformed of late due to market concerns.
Despite these lowered expectations, Wicklund anticipates an increase in drilling results.
“Rig count and margins are expected to move up again in Q3 with the top end of the rig market being fully utilized and not as subject to seasonal changes as much as the rest of the market,” the analyst said.
“The super-spec rigs are more efficient, and that is of paramount importance to PTEN's customers these days as returns become more of a focus.”
Seaport's Urban said a slowdown for super-spec rigs is nowhere in sight. This particular rig market remains extremely tight as companies sign new contracts at leading rates for both existing and upgraded rigs, he said.
Patterson-UTI has four rig upgrades planned through next year, but commentary suggests the pressure pumping market is “soft," the analyst said. Patterson-UTI deserves credit for holding off on adding capacity until market conditions improve, he said.
Patterson-UTI shares were up 5.8 percent at $16.97 at the close Friday.
Deutsche Bank's 3 Favorite Oil Service Picks: Patterson-UTI, Halliburton, C&J
Latest Ratings for PTEN
|Jul 2018||Seaport Global||Upgrades||Neutral||Buy|
|Jul 2018||Credit Suisse||Upgrades||Neutral||Outperform|
View More Analyst Ratings for PTEN
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