Analyst Actions: Credit Suisse On Oilfield Services; Upgrades Baker Hughes, Cites Halliburton and Schlumberger
Credit Suisse says: "We See the Whites of Their Eyes; UPGRADING Baker Hughes Incorporated ( BHI ) to OUTPERFORM (from Neutral); Revising Estimates and TPs."
Halliburton Company ( HAL ): "We believe HAL will outperform the broader oilfield service group over the next 12-18 months based on a reacceleration of the U.S. Land market. With this in mind, the Credit Suisse Investment Policy Committee (IPC) is concurrently adding HAL to the U.S. Focus List as the IPC views this name as one of the most compelling opportunities in the oilfield service sector.
TP to $53 from $44; based on 6.5x 2014E EBITDA."
BHI: "Upgrading to Outperform from Neutral; TP now $54 from $40 (based on 6.0x 2014E EBITDA). After several years of working through an ill-timed acquisition, corporate structure reorganization and other hurdles, we believe the company is getting back on track and is poised to demonstrate improving earnings results."
Schlumberger Limited ( SLB ): "Continues to do well. Increased international activity (and some pricing) and supportive commodity prices will continue to benefit SLB. Our only issue is with the relative valuation which at ~40% premium to the other large cap service companies is difficult to justify until returns improve. Maintain Neutral rating and $79 TP, which is still based on 7.9x 2014E EBITDA."