Goldman Upgrades Oilfield Servicesadmin
Goldman Sachs upgraded the oilfield services sector to “Attractive” from “Neutral,” predicting strong profit growth due to greater drilling activity and high oil prices.
Analyst Charles Minervino expects earnings to grow in the double digits through 2011 as high oil prices lead to more rapid rig construction, and both drilling activity and the rates oil companies pay for drilling will increase.
Minervino raised price targets throughout the sector, and said deep water drillers Transocean Inc., Diamond Offshore Drilling Inc. and Pride International Inc. will get higher rates. He also favors land services that do a significant amount of business in North America, including Halliburton Co., Nabors Industries Ltd. and Helmerich & Payne Inc.
He said Schlumberger Ltd. will benefit from higher spending and rig counts.
Shares in the sector fell Thursday along with the price of oil.