HAL - Patterson-UTI rallies to four-year high after J.P. Morgan upgrade
Patterson-UTI Energy (NASDAQ:PTEN) +6.8% in Thursday's trading to its highest level in four years after J.P. Morgan upgraded shares to Neutral from Underweight with a $20 price target, raised from $14, expecting tight conditions to persist in the U.S. pressure pumping market through at least 2023 driven by supply attrition, fleet cannibalization and increased horsepower requirements at the wellsite. JPM analyst Arun Jayaram said his 2022-23 estimates for Patterson-UTI (PTEN) are slightly ahead of Wall Street consensus and now forecasts ~$375M of normalized free cash flow given strength in drilling and frac services. Jayaram also downgraded ProPetro (NYSE:PUMP) by two notches to Underweight from Overweight with a $14 PT, seeing margin growth lagging peers given the company's higher mix of diesel equipment and likely continued elevated capex following the fleet conversion program that began last September. JPM's top picks in oilfield services remain Overweight-rated Halliburton (HAL) and Nextier Oilfield Soultions (NEX), as
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Patterson-UTI rallies to four-year high after J.P. Morgan upgrade