BKR - Goldman sees challenges for energy services but 'attractive' cash flow by 2023

Goldman Sachs is taking the "oil" out of oil services, rebranding its coverage of oilfield equipment providers (OIH) to "energy services" in the latest sign of the industry's shift away from fossil fuels."Investors should evolve the framework of evaluating this sector from 'traditional oil services' to 'energy services' to better capture emerging drivers of long-term growth," Goldman's Neil Mehta writes.Mehta sees the bread-and-butter oilfield service business as "challenging" for the companies over the next several years as producers keep spending tight and markets remain oversupplied, but a reset in earnings power, tech innovation and energy transition offers growth opportunities.And free cash flow yields for energy services companies look "attractive starting in 2023 as reset earnings power drives margin expansion even with limited capital spending by customers," Mehta writes.Goldman initiates Buy ratings for Baker Hughes (BKR), Liberty Oilfield Services (LBRT) and Schlumberger (SLB), issues Neutral ratings for Halliburton (HAL) and NOV (NOV), and

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Goldman sees challenges for energy services but 'attractive' cash flow by 2023