In a report released yesterday, Saurabh Pant from Bank of America Securities maintained a Buy rating on Patterson-UTI, with a price target of $7.00.
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Saurabh Pant has given his Buy rating due to a combination of factors that highlight Patterson-UTI’s strong financial performance and promising outlook. The company’s second-quarter adjusted EBITDA exceeded consensus expectations by 3%, driven primarily by the strength in Completion Services. Although there were some challenges in Drilling Services, the overall performance was bolstered by efficient cost management and effective utilization of resources.
Patterson-UTI’s guidance for the third quarter suggests a stable EBITDA, aligning closely with consensus estimates, which provides confidence in the company’s near-term prospects. Additionally, the company has demonstrated a commitment to returning value to shareholders, with significant cash returns through dividends and share repurchases. Despite some concerns in the market about potential weaknesses, the resilience in Patterson-UTI’s operations, particularly in Drilling and Completion Services, supports the Buy rating, along with its attractive valuation and strong free cash flow projections.
Pant covers the Energy sector, focusing on stocks such as Patterson-UTI, Baker Hughes Company, and TechnipFMC. According to TipRanks, Pant has an average return of -2.6% and a 47.57% success rate on recommended stocks.
In another report released on July 16, Stifel Nicolaus also maintained a Buy rating on the stock with a $12.00 price target.