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National Oilwell Varco Has the Most ‘Sell’ Ratings

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Analysts’ recommendations for National Oilwell Varco

National Oilwell Varco (NOV) has the highest “sell” recommendations assigned by sell-side analysts in the OFS (oilfield equipment and services) industry. Approximately 10% of the analysts tracking National Oilwell Varco have recommended a “sell” or some equivalent as of June 25. Approximately 76% of the analysts recommended a “hold,” while 14% recommended a “buy” or some equivalent. Analysts’ consensus target price for National Oilwell Varco was ~$37.3 as of June 25. Currently, National Oilwell Varco is trading near $41.3, which implies 10% downside over the next 12 months at the current price.

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How the rating changed

On March 25–June 25, the percentage of analysts recommending a “sell” or some equivalent for National Oilwell Varco decreased from 13% to 10%. Analysts’ “hold” recommendations increased during the same period. A year ago, ~9% of the sell-side analysts recommended a “sell” for National Oilwell Varco.

Some analysts are bearish 

  • There could be a negative spill-over effect due to the cancellation of a large order in the Ca Rong Do project in Vietnam in the first quarter.
  • There’s weak flexible pipe demand.
  • National Oilwell Varco’s management expects volatility in the Rig Aftermarket segment due to an oversupply of land rigs and equipment inventory. Also, the effect of discounts given to customers and the slow inventory-to-cash conversion could have a negative impact on National Oilwell Varco’s margin.

OFS companies with the highest “buy” ratings

Approximately 91% of the sell-side analysts recommended a “buy” for Halliburton (HAL) as of June 25. Approximately 89% of the sell-side analysts recommended a “buy” for Helix Energy Solutions Group (HLX), while 83% recommended a “buy” for U.S. Silica Holdings (SLCA) as of June 25. To learn more, read Top Five Oilfield Equipment and Services Companies.

Next, we’ll review analysts’ ratings for TechnipFMC (FTI).

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