BMO Capital analyst John Gibson CFA maintained a Hold rating on STEP Energy Services (STEP – Research Report) today and set a price target of C$5.00.
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John Gibson CFA has given his Hold rating due to a combination of factors affecting STEP Energy Services. The fourth quarter was relatively weak, influenced by budget constraints at the year’s end, competitive pressures in the U.S., and additional transaction-related expenses. However, there is an expectation of improvement in the first quarter as producer budgets are renewed, with Canadian operations anticipated to counterbalance some of the challenges faced in the U.S. market.
Despite the softer quarter, the company managed to reduce its net debt, which is a positive sign. Nevertheless, the Canadian pressure pumping sector is expected to face pricing pressure due to increased fleet migration, while the U.S. market continues to grapple with oversupply issues. These factors contribute to maintaining a cautious outlook, resulting in a Hold rating and a target price of $5.00.
Based on the recent corporate insider activity of 65 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of STEP in relation to earlier this year.