Actionable news
All posts from Actionable news
Actionable news in HP: HELMERICH & PAYNE Inc,

UBS: Does Anyone Really Care About Bad Oil Earnings?

Invest with Confidence. Are you a financial professional? Stay on top of your portfolio with Benzinga Pro's real-time newsfeed and alerts and never miss a headline again.
Don't miss the chance to try it FREE today.

Baker Hughes Incorporated NYSE:BHI, Halliburton Company NYSE:HAL - UBS: Does Anyone Really Care About Bad Oil Earnings?

Earnings season is a critical time for most companies in the market, but Q1 EPS is likely not particularly important for oil services investors. According to UBS analyst Angie Sedita, it’s no secret that Q1 oil earnings will be terrible, but the investment thesis for oil services stocks is all about the future.

UBS is calling for Q1 earnings to be “challenging” in the oil services space, and she expects things to get even worse in Q2 before bottoming in Q3 of this year.

Sedita believes that the rally in oil services stocks is only 30–40 percent completed at this point, but it may have become overheated in the short-term.

“We view any sell-off in the sector as a more attractive buying opportunity and believe most investors are underweight and still looking to get in,” she explained.

Related Link: Why Wasn't A DOJ Antitrust Lawsuit Bad News For Baker Hughes?

She added that in a $60/bbl oil environment, incremental U.S. oil production in 2017–2018 will come from land, not from expensive deep-water rigs.

UBS maintains Buy ratings on the following stocks:

Disclosure: The author is long Baker Hughes, Schlumberger and Halliburton.

Apr 2016JP MorganMaintainsNeutral
Apr 2016iBERIA Capital PartnersDowngradesOutperformSector Perform
Apr 2016Stephens & Co.DowngradesOverweightEqual-weight

© 2016 Benzinga does not provide investment advice. All rights reserved.