We are upgrading Patterson-UTI Energy (PTEN) shares to Outperform from Neutral, reflecting strong demand for its services in North America. The company has been benefiting from increased activity in the unconventional oil and liquids-rich plays in the region, which have more than made up for the soft natural gas fundamentals.
We believe Patterson-UTI's earnings will continue to push higher, benefiting from its growing premium land rig fleet and the current boom in pressure pumping services. Additionally, the company's stellar financial health (free cash flow positive and a debt-free balance sheet) stands it in good stead.
As such, we believe Patterson-UTI Energy is well positioned going forward and view it as an attractive investment. This is reflected in our upgrade of the company's shares to Outperform from Neutral and our $27 price objective, which is based on 2011 P/E multiple of 11.7X.
PATTERSON-UTI (PTEN): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment