'Glory days ahead' for Canadian oilfield services stocks: BMO
BNN Bloomberg
“We believe the sector is on the verge of a multi-year run in activity levels, while pricing continues to trend higher”
BMO Capital Markets has raised its price targets on a number of Canadian oilfield services companies as North American drilling activity ramps up.
“We believe the sector is on the verge of a multi-year run in activity levels, while pricing continues to trend higher,” John Gibson, an analyst with BMO Capital Markets, wrote in a note to clients titled “Glory Days Ahead, but Expect Volatility to Continue.”
Gibson noted that oilfield activity was already improving as the world emerges from the pandemic, and now, Russia’s invasion of Ukraine has accelerated demand for equipment as the global crude market faces a potential supply shortage.
He said even if the attack on Ukraine subsides and commodity prices decline, he still views the longer-term outlook for the sector as being positive.
Gibson revised his adjusted profit estimates for the sector for this year and next, and now expects year-over-year increases of 40 per cent and 20 per cent, respectively.
He raised his price targets for a number of companies in his coverage universe including AKITA Drilling Ltd., Calfrac Well Services Ltd, Precision Drilling Corp. and Trican Well Service Ltd.
