LBRT - Liberty Oilfield cut to Neutral at Goldman preferring Halliburton

Liberty Oilfield Services (LBRT -2.5%) moves lower after Goldman Sachs downgrades shares to Neutral from Buy with a $13 price target, citing several factors including the "lack of near-term earnings visibility and more gradual margin uplift from net service pricing," which reduces strong mid-cycle potential. Goldman's Neil Mehta also believes Halliburton (HAL -1.5%) offers investors a stronger and safer opportunity to gain exposure to similar near-term cyclical tailwinds on a risk-adjusted basis. Mehta thinks rising labor costs could be a sustained margin headwind, although operational efficiency gains should help offset these pressures. Schlumberger's (SLB -0.7%) 37% ownership stake also presents a longer-term technical headwind for Liberty, as the lockup period expires in September, Mehta says. Last week, Liberty Oilfield reported a larger than expected Q2 loss even as revenues surged.

For further details see:

Liberty Oilfield cut to Neutral at Goldman, preferring Halliburton