- Morgan Stanley downgrades oil services companies Baker Hughes (BHI +0.9%), Weatherford (WFT +1.4%) and Cameron (CAM +2.1%) to Equal Weight from Overweight with slightly reduced price targets.
- The firm says BHI is not likely to outperform peers until it cuts costs to close its margin gap, which it is not likely to achieve without an environment that will foster rapid growth; market share also continues to modestly erode.
- On CAM, while long-term growth drivers are intact, reduced 2014-15 growth in subsea and infrastructure spend is likely to further delay normalization of margins; also, shares have recovered nicely post the Q3 2013 miss.
- While the firm expects WFT to put its back office issues around taxes and DoJ settlements behind it, the stock likely would need a high-growth environment to outperform.
Morgan Stanley downgrades Baker Hughes, Weatherford, Cameron
Jan 14 2014, 15:42 ET