- Basic Energy Services (BAS -2.2%) is downgraded to Hold from Buy with a $0.50 price target, slashed from $2, at Deutsche Bank.
- While BAS's Chapter 11 reorganization likely will create a sustainable path forward for a company the firm sees as an early cycle beneficiary, the move will nearly wipe out existing stockholders, who will be left with just 0.5% of pro-forma BAS equity.
- Deutsche also thinks upstream spending has bottomed and expects the initial spend will focus on production given the low risk, quick cash conversion and little capital outlay; however, existing equityholders will not share in this.