Jefferies Downgrades Helmerich & Payne (HP), Pioneer Energy Services (PES) to Hold

July 9, 2013 8:50 AM EDT Send to a Friend
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Price: $58.31 +5.84%

Rating Summary:
    14 Buy, 17 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 27 | Down: 8 | New: 16
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Jefferies downgraded Helmerich & Payne (NYSE: HP) and Pioneer Energy Services (NYSE: PES) from Buy to Hold and lowered estimates on other Land Drillers as they see ongoing higher capex, less earnings growth and less-than-attractive shares.

"Drilling efficiencies and an even-more muted gas outlook could leave the U.S. rig count flat for two years. We think drillers likely chase the ongoing displacement of mechanical rigs by AC rigs. The result, in our view, is ongoing higher capex, less earnings growth and less-than-attractive shares. We downgrade HP and PES to Hold from Buy, although HP's FCF and leadership leave it as our preferred stock in this segment.

The firm cut its price target on HP from $74 to $71, on PES from $9 to $8, on Patterson-UTI Energy (Nasdaq: PTEN) from $23 to $20, and upped its target on Nabors Industries Ltd. (NYSE: NBR) from $14 to $15.

For an analyst ratings summary and ratings history on Helmerich & Payne click here. For more ratings news on Helmerich & Payne click here.

Shares of Helmerich & Payne closed at $65.85 yesterday.

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