Best Oilfield Services Stocks for 1Q17 by EBITDA Growth



Will Fairmount Santrol be the outperformer?

Wall Street analysts expect Fairmount Santrol Holdings (FMSA) to see the highest EBITDA (earnings before interest, tax, depreciation, and amortization) growth in 1Q17 compared to 4Q16 in our group of select OFS (oilfield services and equipment) companies. EBITDA is a measure of a company’s operating earnings. You can read more on FMSA in Market Realist’s Fairmount Santrol’s 4Q16: A Mixed Story in Four Parts.

Fairmount Santrol is expected to post $22.5 million in adjusted EBITDA in 1Q17. That’s 73.0% higher than $13.0 million in 4Q16. FMSA expects growth to result from the following:

  • strong demand for proppant
  • higher proppant intensity per well
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Weatherford International’s expected EBITDA growth

Analysts expect Weatherford International’s (WFT) adjusted EBITDA to be ~$108.0 million in 1Q17. That’s a rise of 62.0% from 4Q16. The rise could be due to the following:

  • increased service revenues in the Middle East–North Africa region
  • higher rig revenue from additional contracted rigs in Algeria
  • absence of pressure pumping business loss and cost-saving initiatives to improve operating earnings

NOV’s expected EBITDA growth

National Oilwell Varco (NOV) is expected to post $110.3 million in adjusted EBITDA in 1Q17. That would be 8.0% higher than 4Q16. NOV management expects an increasing demand for valves and seats, fluid ends, and flow iron. It also anticipates that a higher demand in 1Q17 for equipment repairs and rebuilds for wireline units, nitrogen pumps, and coiled tubing units will propel its operating profit.

Wall Street analysts expect Halliburton’s (HAL) EBITDA to rise ~4.0% in 1Q17 compared to 4Q16. HAL makes up 0.19% of the iShares S&P 500 Value (IVE). You can read more about HAL in Market Realist’s Halliburton Stock Faces Headwinds amid a Strong Performance.

In the next part of this series, we’ll look at the five OFS companies that are expected to have the steepest falls in EBITDA in 1Q17.


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