- Schlumberger (SLB +0.4%) is upgraded to Buy from Neutral with a $75 price target at BofA Merrill Lynch, which says shares underperformed and fund ownership fell in 2017 as investor focus shifted towards more shale-focused names.
- BofA believes investors soon will shift their focus from the domestic U.S. oil industry to international and to offshore business, where SLB is the "star of the show."
- “The heavyweight in international oilfield services, SLB should benefit from long-awaited activity improvement even if better pricing takes time,” writes BofA's Timna Tanners.
- BofA also upgrades Baker Hughes (BHGE -1.2%) to Neutral from Underperform with a $33 target, saying the shares no longer look overvalued following their recent selloff.
- However, BofA also downgrades Halliburton (HAL -0.4%) to Neutral from Buy with a $50 target, saying the stock's recent outperformance may have already fully priced in the normalized industry activity.
- “While U.S. completion conditions remain strong... we believe this is largely recognized by the market, with most frac-exposed names already discounting a plateau or correction," the firm says.