BTIG Starts National Energy Services Reunited (NESR) at Buy

BTIG analyst Greg Lewis initiates coverage on National Energy Services Reunited (NASDAQ: NESR) with a Buy rating and a price target of $15.00.

The analyst comments "Despite the ongoing headwinds facing the global oil markets, oilfield activity in the Middle East continues to improve with Middle East spending expected to be up ~8% Y-Y in 2024 and another ~8-10% Y-Y in 2025. And while most eyes are focused on OPEC+ decision later this year to begin unwinding the current ~2.2 MBD of production cuts put in place in 4Q23, the combination of 1) sustaining oil activity and gas development in Saudi Arabia, 2) continued growth from the UAE as they look to ramp oil production capacity, and 3) offshore discoveries and rig activity ramping in Kuwait points to increasing activity across NESR's core Middle East market. We expect continued activity growth in the Middle East (~85% of revenue) to help push EBITDA margins higher, while we view the activity outlook in North Africa (~10% of revenue) as more muted in the near term. In terms of our reinitiation timing, NESR uplisted onto the NASDAQ on Tuesday after being delisted in June 2023 following noncompliance with SEC filing requirements. Bottom line: NESR is a leveraged play on MENA oilfield activity that should generate solid free cash flow in 2025 (FCF yield of 12%-14%) to continue to drive organic and inorganic growth. We reinitiate with a Buy rating and $15 PT. "

For an analyst ratings summary and ratings history on National Energy Services Reunited click here. For more ratings news on National Energy Services Reunited click here.

Shares of National Energy Services Reunited closed at $9.39 yesterday.

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