4 Oilfield Services Stocks Set to Escape Industry Weakness

Zacks05-10

Strict capital discipline among upstream energy companies is dampening the demand for oilfield services, leading to a gloomy outlook for the Zacks Oil and Gas- Field Services industry. The prosperity ...

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The prosperity ...</p>\n\n<a href=\"https://finance.yahoo.com/news/4-oilfield-services-stocks-set-132300549.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1720051017.SGD","symbol_name":"Allianz Global Artificial Intelligence AT Acc H2-SGD","start_time":0,"source_url":"https://finance.yahoo.com/news/4-oilfield-services-stocks-set-132300549.html","article_id":"2434868496","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/Bb3HhzvR12atkV.H1bCxmg--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/f2386bab33b7b86b8371993cc9af867a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2434868496","pubTimestamp":1715347380,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Strict capital discipline among upstream energy companies is dampening the demand for oilfield services, leading to a gloomy outlook for the ZacksOil and Gas- Field Services industry. The prosperity of companies within this industry greatly depends on their ability to navigate the evolving energy transition landscape skillfully. Consequently, failing to meet energy transition objectives will negatively impact cash flow.Among the companies in the industry that are likely to survive the business challenges are SLB SLB, Halliburton Company HAL, Baker Hughes Company BKR and Smart Sand Inc. SND.3 Trends Defining the Oilfield Services Industry's Future. The Zacks Oil and Gas – Field Services is a 24-stock group within the broader ZacksOil - Energysector. The industry currently carries a Zacks Industry Rank #153, which place","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD",".SPX":"S&P 500 Index","OEX":"标普100","IVV":"标普500指数ETF","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","LU1548497426.USD":"安联环球人工智能AT Acc","SGXZ23171101.USD":"NIKKO AM SHENTON GLOBAL OPPORTUNITIES (USD) ACC","LU0985489474.SGD":"First Eagle Amundi International AHS-C SGD-H","BK4581":"高盛持仓","LU0300736062.USD":"FRANKLIN NATURAL RESOURCES \"A\" (USD) ACC","BK4504":"桥水持仓","LU0122376428.USD":"贝莱德世界能源基金A2","LU0878866978.SGD":"First Eagle Amundi International AHS-QD SGD-H","LU0368265418.SGD":"Blackrock World Energy Fund A2 SGD-H","LU0211331839.USD":"FRANKLIN MUTUAL GLB DISCOVERY \"A\" (USD) ACC","LNG":"Cheniere Energy Inc","LU0433182093.SGD":"First Eagle Amundi International AS-C SGD","SLB":"斯伦贝谢","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","LU0068578508.USD":"First Eagle Amundi International Cl AU-C USD","BKR":"贝克休斯","HAL":"哈里伯顿","BK4144":"石油与天然气的储存和运输","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","LU2106854487.HKD":"ALLIANZ THEMATICA \"AMG\" (HKD) INC","SND":"Smart Sand Inc.","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK4585":"ETF&股票定投概念","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","SDS":"两倍做空标普500ETF","VOO":"Vanguard标普500ETF","SSO":"两倍做多标普500ETF","LU0256331488.USD":"SCHRODER ISF GLOBAL ENERGY \"A\" ACC","LU2023250843.SGD":"Allianz Thematica Cl AT Acc H2-SGD","BK4566":"资本集团","SPXU":"三倍做空标普500ETF","LU2237438978.USD":"Amundi Funds US Pioneer A2 (C) USD","SH":"标普500反向ETF","BK4559":"巴菲特持仓","LU0251142724.SGD":"Fidelity America A-SGD","LU1489326972.SGD":"First Eagle Amundi International AHS-MD SGD-H","BK4550":"红杉资本持仓","BK4588":"碎股","UPRO":"三倍做多标普500ETF","OEF":"标普100指数ETF-iShares","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","LU2236285917.USD":"ALLIANZ GLOBAL INCOME \"AMG\" (USD) INC","SPY":"标普500ETF"},"translate_title":"4油田服务类股将摆脱行业疲软","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LNG":1,"BKR":1,"SLB":1,"SND":1,"HAL":0.9,"VOO":0.76,"SPY":0.76,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,"ESmain":0.6,"IVV":0.6,".SPX":0.6},"content_text":"Strict capital discipline among upstream energy companies is dampening the demand for oilfield services, leading to a gloomy outlook for the Zacks Oil and Gas- Field Services industry. The prosperity of companies within this industry greatly depends on their ability to navigate the evolving energy transition landscape skillfully. Consequently, failing to meet energy transition objectives will negatively impact cash flow.Among the companies in the industry that are likely to survive the business challenges are SLB SLB, Halliburton Company HAL, Baker Hughes Company BKR and Smart Sand Inc. SND.\nAbout the Industry\nThe Zacks Oil and Gas - Field Services industry comprises companies that primarily engage in providing support services to exploration and production players. These companies help in manufacturing, repairing and maintaining wells, drilling equipment, leasing of drilling rigs, seismic testing and transport and directional solutions, among others. Also, the firms help upstream energy players locate oil and natural gas and drill and evaluate hydrocarbon wells. Hence, oilfield services businesses are positively correlated to expenditures from upstream firms. Furthermore, with countries worldwide investing heavily in liquefied natural gas (LNG) terminals, a few oilfield service companies are extending their reach beyond the hydrocarbon fields and capitalizing on contracts for manufacturing equipment used in LNG facilities to decrease carbon emissions.\n3 Trends Defining the Oilfield Services Industry's Future\nHighly Volatile Business: The demand for oilfield services is predominantly tied to exploration and production activities. Given the reliance of oil explorers and producers on the volatile commodity pricing landscape, the business of oilfield service companies is susceptible to uncertainty.   \nLower Upstream Spending: Although the commodity pricing scenario is favorable for exploration and production operations, there has been a slowdown in drilling activities, which may continue as upstream players are prioritizing stockholder returns rather than boosting output. Drilling activity slowdown signifies lower demand for oilfield services as oilfield service players mainly assist upstream companies in setting up oil and gas wells.\nImpacts of Failing Energy Transition Goals on Cashflows: The prosperity of companies within the industry hinges greatly on their adeptness in navigating the evolving energy transition landscape. This encompasses the ability of oilfield service providers to efficiently tackle the decarbonization of oil and gas operations while expanding the adoption of inventive, low-carbon and carbon-neutral technologies. Consequently, falling short of energy transition objectives will have repercussions on cash flow.\nZacks Industry Rank Indicates Bearish Outlook\nThe Zacks Oil and Gas – Field Services is a 24-stock group within the broader Zacks Oil - Energy sector. The industry currently carries a Zacks Industry Rank #153, which places it in the bottom 39% of more than 250 Zacks industries.\nThe group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates gloomy near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.\nBefore we present a few stocks that you may consider, let’s take a look at the industry’s recent stock-market performance and valuation picture.\nIndustry Lags S&P 500, Outperforms Sector\nThe Zacks Oil and Gas – Field Services industry has lagged the Zacks S&P 500 composite but outperformed the broader Zacks Oil – Energy sector over the past year.\nThe industry has jumped 26.6% over this period compared with the S&P 500’s rise of 27.7% and the broader sector’s 19.7% growth.\nOne-Year Price Performance\n\nIndustry's Current Valuation\nSince oil and gas companies are debt-laden, it makes sense to value them based on the EV/EBITDA (Enterprise Value/Earnings before Interest Tax Depreciation and Amortization) ratio. This is because the valuation metric takes not just equity into account but also the level of debt. For capital-intensive companies, EV/EBITDA is a better valuation metric because it is not influenced by changing capital structures and ignores the effect of non-cash expenses.\nOn the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 7.40X compared with the S&P 500’s 13.93X and sector’s 2.99X.\nOver the past five years, the industry has traded as high as 12.68X and as low as 1.01X, with a median of 8.21X.\nTrailing 12-Month Enterprise Value-to EBITDA (EV/EBITDA) Ratio\n\n\n4 Oilfield Services Stocks Trying to Survive Industry Challenges\nSLB: SLB is well known for transforming the oil and gas industry by employing its cutting-edge solutions. With its quantifiably proven solutions, it is lowering emissions and related impacts. SLB, carrying a Zacks Rank #3 (Hold), is likely to see earnings growth of 17.8% this year. \nPrice and Consensus: SLB\n\nBaker Hughes: In the first quarter, the company attained two key, multi-year contracts for both onshore and offshore services from Petrobras through its Oilfield Service & Equipment business segment. Baker Hughes, with a Zacks Rank of 3, has thus secured incremental cashflows.\nPrice and Consensus: BKR\n\nHalliburton Company: Halliburton is also a leading oilfield service player, expecting margin expansion from the international market. The Zacks #3 Ranked company is predicting year-over-year flat margins from its North American activities. \nPrice and Consensus: HAL\n\nSmart Sand: Being a leading manufacturer of Northern White sand, known for its superior quality and cost-effectiveness, the company has a solid business model. The Northern White sand serves as a premium proppant in hydraulic fracturing processes to improve the recovery rates of hydrocarbons in both oil and natural gas wells. Smart Sand currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. \nPrice and Consensus: SND\n\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nSchlumberger Limited (SLB) : Free Stock Analysis Report\nHalliburton Company (HAL) : Free Stock Analysis Report\nBaker Hughes Company (BKR) : Free Stock Analysis Report\nSmart Sand (SND) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.28.1","shortVersion":"4.28.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2434868496"}