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What’s behind Helix Energy’s High ‘Buy’ Ratings?

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Analysts’ rating for Helix Energy Solutions

Helix Energy Solutions Group (HLX) has the second-highest “buy” ratings assigned by sell-side analysts in the OFS (oilfield equipment and services) industry. Approximately 89% of the Wall Street analysts tracking Helix Energy Solutions have recommended a “buy” or some equivalent as of June 19. Analysts’ consensus target price for Helix Energy Solutions was ~$8.8 as of June 19. Currently, Helix Energy Solutions is trading near $7.4, which implies 19% returns over the next 12 months at the current price.

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How Helix Energy Solution’s rating changed

On March 19–June 19, the percentage of analysts recommending a “buy” or some equivalent for Helix Energy Solutions increased from 70% to 89%. Analysts’ “hold” recommendations decreased during the same period. A year ago, ~90% of the sell-side analysts recommended a “buy” for Helix Energy Solutions.

Factors that impacted Helix Energy Solution’s performance

  • Well intervention operations started in Brazil. There were also higher revenues from the Gulf of Mexico.
  • Brazil saw a higher utilization of vessels, while reduced vessel utilization of Q5000 and a vessel in the North Sea partially restricted Helix Energy Solution’s revenue growth.
  • Higher ROV (remotely operated vehicle) and trenching revenues pushed the Robotics segment’s revenues higher in the first quarter.
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Analysts are bullish about Helix Energy Solutions

Helix Energy Solution’s management expects the Grand Canyon to show marked improvement for the rest of the year on the basis of greater utilization, driven primarily by a strong trenching market. The Grand Canyon is one of Helix Energy Solution’s ROV support vessels. According to the company, vessels prices in the North Sea appear to be holding, while pricing pressure continues to weigh on the rates in the Gulf of Mexico. Helix Energy Solutions expects to see higher revenues due to downtime event reductions and improving efficiencies.

OFS companies with “buy” ratings near the industry average

Compared to the OFS industry’s average of 51% “buy” ratings, Tenaris’s (TS) “buy” recommendations were 50% as of June 19. Superior Energy Services’ (SPN) “buy” recommendations were also 50% as of June 19. McDermott International’s (MDR) “buy” ratings were 55% as of June 19.

Next, we’ll discuss analysts’ ratings for U.S. Silica Holdings (SLCA).

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