3 Oilfield Services Stocks Set to Escape Industry Weakness

Zacks10-24

Strict capital discipline among upstream energy companies is reducing demand for oilfield services, casting a bleak outlook for the Zacks Oil and Gas- Field Services industry. The success of companies...

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The success of companies...</p>\n\n<a href=\"https://finance.yahoo.com/news/3-oilfield-services-stocks-set-124600485.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":"AROC","symbol_name":"Archrock, Inc","start_time":0,"source_url":"https://finance.yahoo.com/news/3-oilfield-services-stocks-set-124600485.html","article_id":"2477371606","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/Y9DyFj7gjXfxD.Zap6F.mQ--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/2ec7f75c23c1db9ea656da7a7bb4ea95"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2477371606","pubTimestamp":1729773960,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Strict capital discipline among upstream energy companies is reducing demand for oilfield services, casting a bleak outlook for the ZacksOil and Gas- Field Services industry. The success of companies in this space hinges on their ability to adeptly manage the shifting energy transition landscape. As a result, failing to achieve energy transition goals could have a detrimental effect on cash flow.Among the companies in the industry that are likely to survive the business challenges are Baker Hughes Company BKR, Archrock Inc AROC and Smart Sand Inc. SND.3 Trends Defining the Oilfield Services Industry's Future. The Zacks Oil and Gas – Field Services is a 22-stock group within the broader ZacksOil - Energysector. The industry currently carr","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"AROC":"Archrock, Inc","SDS":"两倍做空标普500ETF","UPRO":"三倍做多标普500ETF","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","BK4566":"资本集团","LU2106854487.HKD":"ALLIANZ THEMATICA \"AMG\" (HKD) INC","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","SND":"Smart Sand Inc.","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","IVV":"标普500指数ETF","SLB":"斯伦贝谢","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","LU2023250843.SGD":"Allianz Thematica Cl AT Acc H2-SGD","BK4588":"碎股","LU0788109394.HKD":"BGF WORLD ENERGY \"A2\" (HKDHGD) ACC","HAL":"哈里伯顿","SSO":"两倍做多标普500ETF","LU0251142724.SGD":"Fidelity America A-SGD","SH":"标普500反向ETF","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","LNG":"Cheniere Energy Inc",".SPX":"S&P 500 Index","LU0314104364.USD":"MANULIFE GF AMERICAN GROWTH \"AA\" (USD) INC","LU0154245756.USD":"BNP PARIBAS US MID CAP \"C\" (USD) ACC","SPXU":"三倍做空标普500ETF","OEX":"标普100","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","LU2236285917.USD":"ALLIANZ GLOBAL INCOME \"AMG\" (USD) INC","LU0154245673.USD":"BNP PARIBAS US MID CAP \"C\" (USD) INC","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","LU0300736492.USD":"FRANKLIN NATURAL RESOURCES \"A\" (USD) INC","LU1548497426.USD":"安联环球人工智能AT Acc","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","SPY":"标普500ETF","LU0300736062.USD":"FRANKLIN NATURAL RESOURCES \"A\" (USD) ACC","LU0878866978.SGD":"First Eagle Amundi International AHS-QD SGD-H","LU0122376428.USD":"贝莱德世界能源基金A2","VOO":"Vanguard标普500ETF","LU2449327464.USD":"HSBC GIF GLOBAL INFRASTRUCTURE EQUITY \"AC\" (USD) ACC","BK4144":"石油与天然气的储存和运输","LU0433182093.SGD":"First Eagle Amundi International AS-C SGD","BKR":"贝克休斯","OEF":"标普100指数ETF-iShares","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","LU1917777945.USD":"安联专题基金Cl AT Acc","TOPS":"TOP Ships Inc"},"translate_title":"3只油田服务股将摆脱行业疲软","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TOPS":1,"SND":1,"SLB":1,"LNG":1,"BKR":1,"HAL":1,"AROC":0.9,"VOO":0.76,"SPY":0.76,"SDS":0.6,"OEF":0.6,"OEX":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,".SPX":0.6,"IVV":0.6,"ESmain":0.6},"content_text":"Strict capital discipline among upstream energy companies is reducing demand for oilfield services, casting a bleak outlook for the Zacks Oil and Gas- Field Services industry. The success of companies in this space hinges on their ability to adeptly manage the shifting energy transition landscape. As a result, failing to achieve energy transition goals could have a detrimental effect on cash flow.Among the companies in the industry that are likely to survive the business challenges are Baker Hughes Company BKR, Archrock Inc AROC 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 like SLB SLB and Halliburton Company HAL 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. The reduction in drilling activity indicates lower demand for oilfield services, as companies like SLB and Halliburton, which primarily assist upstream operators in setting up oil and gas wells, are impacted by this shift.\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 affect cash flow.\nZacks Industry Rank Indicates Bearish Outlook\nThe Zacks Oil and Gas – Field Services is a 22-stock group within the broader Zacks Oil - Energy sector. The industry currently carries a Zacks Industry Rank #164, which places it in the bottom 34% 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 & Sector\nThe Zacks Oil and Gas – Field Services industry has lagged the Zacks S&P 500 composite and the broader Zacks Oil – Energy sector over the past year.\nThe industry has declined 12.5% over this period against the S&P 500’s rise of 40.5% and the broader sector’s 5.8% 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 into account not just equity 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 6.75X compared with the S&P 500’s 19.33X and sector’s 3.35X.\nOver the past five years, the industry has traded as high as 12.73X and as low as 1.01X, with a median of 8.16X.\nTrailing 12-Month Enterprise Value-to EBITDA (EV/EBITDA) Ratio\n\n\n3 Oilfield Services Stocks Trying to Survive Industry Challenges\nArchrock\nArchrock's acquisition of Total Operations and Production Services (TOPS) brings a young, fully electric compression fleet, significantly expanding its capacity and improving margins. By retaining the TOPS management team, Archrock has gained valuable expertise in managing electric-driven compression fleets, positioning itself as a leader in the shift toward electrified natural gas compression.\nPrice and Consensus: AROC\n\nBaker Hughes\nBaker Hughes has been experiencing substantial growth in gas infrastructure projects, securing orders in strategic regions such as the Middle East and Latin America. BKR, with a Zacks Rank of 3, also continues to expand its digital and artificial intelligence (AI) offerings, such as its collaboration with Repsol to develop next-generation AI capabilities for upstream production, further improving operational efficiency. \nPrice and Consensus: BKR\n\nSmart Sand \nThe company is a leading manufacturer of Northern White sand, known for its superior quality and cost-effectiveness and it 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 sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rankstocks 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\nArchrock, Inc. (AROC) : 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":"4.29.1","shortVersion":"4.29.1","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/2477371606"}