UPDATE: Goldman Sachs Sees 30% Upside in C&J Energy Services (CJES), Adds to Conviction Buy List

(Updated - April 27, 2015 8:51 AM EDT)

Goldman Sachs upgraded C&J Energy Services (NYSE: CJES) from Buy to Conviction Buy with a price target of $19 (from $14), suggesting potential upside of nearly 30%. Analyst Waqar Syed thinks the stock offers cyclical and secular trends.

"Cyclically, our forecast 27% increase in US pressure pumping demand for 2016 should benefit this best-in-class pressure pumper. On the secular side, the company’s well thought out plan to position itself as a major NAM service company should serve it well, as consolidation among the Big-3 creates room for a well-run SMID to gain share in PP," said Syed.

"Also, CJES is well positioned to lower its operating cost structure using scale advantages gained from the NBR merger, and from using lower priced internally manufactured consumables in pressure pumping. In our view, after HAL, CJES has launched the most aggressive effort to structurally reduce its pressure pumping costs, which should serve it well in a low oil price environment," added the analyst.

For an analyst ratings summary and ratings history on C&J Energy Services click here. For more ratings news on C&J Energy Services click here.

Shares of C&J Energy Services closed at $14.73 yesterday.

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