UPDATE: Morgan Stanley Downgrades NexTier Oilfield Services (NEX) to Equalweight

Morgan Stanley analyst Connor Lynagh downgraded NexTier Oilfield Services (NYSE: NEX) from Overweight to Equalweight with a price target of $13.00.

The analyst comments "Factors supporting our downgrade include that we see less upside revisions potential for NEX vs. peers from both an EBITDA and FCF perspective (FCF – NEX: 8% / peers: 14%; EBITDA – NEX:5% / peers: 9%), though NEX does screen attractively on valuation vs. peers and vs. its historical trading range (NEX currently trades at ~1.5x EV/EBITDA on our 2023E base case,a ~70% discount vs. its historical median of ~5.0x,vs. the median peer discount of ~50%), plus we see one of the more attractive FCF yields for NEX in our NAm focused coverage group (NEX:31% / peers: 14%). Additionally,upside to our PT for NEX is on the higher-end of the peer group, plus we see NEX exiting 2022atnearly a net cash position,and it therefore screens attractively vs. peers in terms of downside protection, in our view. Net-net,however, we see NEX's risk-reward as relatively balanced at this time, supporting our EW-rating (Bull:Bear skew for NEX: 4.3x / peers: 4.3x)."

For an analyst ratings summary and ratings history on NexTier Oilfield Services click here. For more ratings news on NexTier Oilfield Services click here.

Shares of NexTier Oilfield Services closed at $6.88 yesterday.

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