HAL - Halliburton NexTier Patterson-UTI top oilfield service names at Raymond James

Halliburton ( NYSE: HAL ), NexTier Oilfield Solutions ( NYSE: NEX ) and Patterson-UTI Energy ( NASDAQ: PTEN ) are rated Strong Buy at Raymond James, as the firm relaunched coverage Friday of the oilfield services sector against a favorable macro backdrop.

"A sustained period of underinvestment during an exceptionally weak macro environment coupled with rising energy transition pressures set up the current oil supply situation, for which there is no short-term fix," Ray Jay's James Rollyson wrote.

The oilfield services sector ( OIH ) is set up for "a sustained period of free cash flow generation, as limited new capacity provides for an extended period of strong margins," according to Rollyson.

The analyst said the group's median free cash flow yield over the next 12 months is "north of 11%... meaningfully higher than other industry sectors" that currently trade for higher valuations.

In the report, Ray Jay also rated Archrock ( AROC ), NOV Inc. ( NOV ) and Schlumberger ( SLB ) at Outperform.

Halliburton ( HAL ) and NexTier ( NEX ) also ranked among the top oilfield services stocks in a recent report from J.P. Morgan .

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