Halliburton, Schlumberger top oilfield service stocks as new Buys at Benchmark
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Halliburton (NYSE:HAL) and Schlumberger (NYSE:SLB) are set to benefit in the intermediate term from increased exploration and production spending on international and offshore projects, and become leaders in the energy transition in the long term, Benchmark said Thursday as it launched coverage with Buy ratings with respective $50 and $65 price targets.
Benchmark's Kurt Hallead sees Halliburton (HAL) generating $6Bn in EBITDA in 2024, valuing the company at 6.6x that amount, at the lower end of the stock's historical range of 6x-9x.
The analyst also believes SLB (SLB) can achieve double-digit growth in EBITDA, return on capital employed and free cash flow margin between now and 2025.
Hallead is broadly bullish on the oilfield services sector (NYSEARCA:OIH), also awarding Buy ratings to Baker Hughes (BKR), Cactus (WHD), Noble (NE), NOV (NOV), Oceaneering (OII), TechnipFMC (FTI), Transocean (RIG) and Valaris (VAL), while rating Helmerich & Payne (HP), Nabors Industries (NBR), Patterson-UTI Energy (PTEN) and ProPetro (PUMP) at Hold.
Saying upcoming 2023 capital budgets should yield outsized sales growth at Halliburton (HAL), Wolfe Research recently double upgraded the stock to Outperform.