International capex is estimated to rise to $375 billion in 2023, again well below the 2017 through 2019 average of $391 billion. By 2025, the Wells Fargo analysts expect international exploration and production capex to surpass $400 billion, close to the five-year (2015-2019) average of $417 billion.
Wells Fargo’s top pick among six oilfield services stocks is Schlumberger Ltd. (NYSE: SLB). The analysts have maintained their Overweight rating on the company and raised their price target from $43 to $56. Based on Tuesday’s closing price of $42.63, the upside potential is 32%, based on a multiple of 12 times estimated 2023 EBITDA.
Baker Hughes Co. (NYSE: BKR) was upgraded from Equal Weight to Overweight and the $28 price target was raised to $43. Based on Tuesday’s closing price of $36.67, the upside potential is 16%, based on a sum-of-the-parts analysis. Read and Walker base their upgrade on the “prospects of a split into two separate companies, the improved outlook for LNG orders, and improvements in global [oilfield services operations].”
Wells Fargo maintained its Overweight rating on Chart Industries Inc. (NYSE: GTLS), while raising the price target on the stock from $166 to $200. The upside potential based on Tuesday’s closing price of $174.74 is 15%. The analysts based the change on a multiple of nine times estimated 2023 EBITDA.
Halliburton Co. (NYSE: HAL) was maintained at an Equal Weight rating and the price target was raised from $30 to $40. At Tuesday’s closing price of $37.85, the potential upside on the stock is 4%, based on a multiple of 10 times estimated 2023 EBITDA.
Liberty Oilfield Services Inc. (NYSE: LBRT) was downgraded from Overweight to Equal Weight and the price target was increased from $14 to $15. At Tuesday’s closing price of $14.83, there is essentially zero upside potential, based on a multiple of six times estimated 2023 EBITDA. The analysts wrote that Liberty’s “[year-to-date] share price performance limits upside potential.”
Wells Fargo maintained its Underweight rating on NOV Inc. (NYSE: NOV), while raising the price target on the stock from $14 to $16. Based on Tuesday’s closing price of $19.66, the stock price faces a decline of around 19%. The analysts based their change on a multiple of nine times estimated 2023 EBITDA.
Originally posted at 24/7 Wall St.
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