Oilfield services stocks have significantly underperformed broader markets in recent years. In 2019, top oilfield stock Schlumberger (SLB) has fallen around 1%. In comparison, Halliburton (HAL) is down 23% year-to-date.
Both stocks have underperformed the S&P 500 Index, which has risen 22% over the same timeframe. While oilfield stocks are out of favor with investors, Wall Street analysts remain bullish on their prospects.
Analysts’ ratings for Halliburton
Around 78% of analysts surveyed by Reuters covering Halliburton rated the stock a “buy” or “strong buy.” The remaining 22% rated it a “hold.” Analysts have a mean price target of $26.5 for Halliburton, which implies upside potential of 26% from its current levels.
Halliburton also saw quite a few price target cuts after its Q3 earnings results in October. RBC, Evercore ISI, Zephirin Group, Cowen and Company, and Stifel all cut their price targets for the stock. On the other hand, Citigroup raised its price target for HAL by $2 to $27.
More analysts recommend oilfield stock Halliburton as a “buy” than its peer Schlumberger. Also, analysts believe Halliburton has a higher upside potential than its rival.
Analysts’ ratings for Schlumberger
A total 68% of analysts rated Schlumberger as a “buy” or “strong buy,” and 29% rate it as a “hold” while 3% rate it as a “sell.” Schlumberger’s mean price target of $43.8 implies upside potential of 19% from its current levels.
Like Halliburton, Schlumberger saw a series of price target cuts after its Q3 earnings—despite posting strong results for the quarter. Seven analysts cut their price targets for SLB stock after the company reiterated its expectations for weak activity in North America.
Other oilfield stocks
The above chart compares analysts’ ratings for top oilfield stocks. 81% of analysts recommend Baker Hughes Company (BKR) as a “buy.” It has upside potential of 26%, based on its mean price target. Helmerich and Payne (HP) stock has upside potential of 13%, in comparison.
Of the top oilfield stocks, National Oilwell Varco (NOV) got the fewest “buy” ratings. Analysts expect NOV stock to rise only 6% from its current levels. On the other hand, TechnipFMC (FTI) has the most upside potential at 42%, based on its mean price target.