Core Laboratories ( NYSE: CLB ) -2% in Monday's trading after Morgan Stanley downgrades shares to Underweight from Equal Weight with a $20 price target, while Helmerich & Payne ( NYSE: HP ) +4.4% after the firm upgraded shares to Overweight from Equal Weight with a $55 PT, raised from $48.
Morgan Stanley analyst Connor Lynagh sees less potential for upside EBITDA and free cash flow revisions as well as higher leverage for Core Labs ( CLB ) relative to its peer group, as well as outsized exposure to longer-cycle international markets, where the analyst's activity estimates have decreased marginally vs. upward revisions for North American land markets.
However, the analyst thinks Core Labs' ( CLB ) outsized international and offshore activity exposure would be a relative benefit if oil prices and upstream activity surprise to the downside.
Meanwhile, Lynagh sees potential for peer-leading free cash flow revisions for Helmerich & Payne ( HP ) despite below average EBITDA upside and above average capex upside compared with peers.
The analyst also said Helmerich & Payne ( HP ) has an outsized share of idle top-tier U.S. land rigs, which likely will support near-term share growth for the company in the current market.
Helmerich & Payne's ( HP ) swung to positive net income in the most recent quarter is "an encouraging sign," Fun Trading writes in a bullish analysis posted recently on Seeking Alpha .
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Core Labs cut to Sell equivalent at Morgan Stanley on international exposure