Goldman sees positive setup for Halliburton, Schlumberger, oil services


Goldman Sachs is out positive on oil service stocks (OIH) as earnings season begins, with negative investor sentiment creating a favorable setup for the sector.

Among Goldman's reasons: WTI saturation is unlikely in 2014; negative revenue surprises during the year may be offset somewhat by positive margin surprises; and capex should rise by mid-single digits but companies with exposure to horizontal completions on U.S. land and with high Gulf of Mexico and Middle East exposure should see revenue growth at the upper end.

The firm recommends owning Halliburton (HAL) and Schlumberger (SLB) into earnings, and likes NBR, RES, CJES, BAS, PES and OII.

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Comments (3)
  • Pillpoppinpuppy
    , contributor
    Comments (240) | Send Message
     
    Goldman was the lead underwriter on CJES's IPO a couple years ago, so that one can be totally discounted.
    16 Jan 2014, 09:18 PM Reply Like
  • Caleybale
    , contributor
    Comments (74) | Send Message
     
    Meanwhile, CJES is up 15% since the analysis...
    6 Feb 2014, 02:06 PM Reply Like
  • Pillpoppinpuppy
    , contributor
    Comments (240) | Send Message
     
    ...And a mere 15% below its IPO price of $29 over two years ago, compared with a 20% rise in the oil service ETF (OIH).

     

    I also find your 15% calculation dubious. I get $24.54/22.19-1 = 11%.
    7 Feb 2014, 08:11 AM Reply Like
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