Piper Sandler Analyst Adjusts Price Target for Patterson Uti Energy Following Q1 Earnings

Piper Sandler's Luke Lemoine lowered their price target on Patterson Uti Energy (NASDAQ: PTEN) by 17.6% from $17 to $14 on 2024/05/06. The analyst maintained their Strong Buy rating on the stock.

In their assessment of the oil and gas drilling services company's first-quarter earnings report, Lemoine highlighted the relative stability of the industry exchange-traded fund (ETF) during the reporting period. According to Lemoine, the OIH, which tracks the performance of the oil services sector, experienced a significant sell-off leading up to the earnings season but has since remained relatively flat.

As a result, Lemoine noted that several stocks within the ETF were de-risked, leading to less volatility than expected. This observation likely influenced Lemoine's decision to lower the price target on Patterson Uti Energy, as they believed the stock would not experience the anticipated level of volatility following the earnings release.

In addition to the adjustment made to PTEN's price target, Lemoine also made changes to other names in their portfolio. The analyst lowered the price target on Oil States International Inc by 6.3%, from $8 to $7.5, while maintaining a Hold rating. Conversely, Lemoine raised the price target on Precision Drilling Corp by 24.7%, from $81 to $101, and Technipfmc PLC by 13.3%, from $30 to $34, both while maintaining a Strong Buy rating. Lastly, Lemoine decreased the price target on Tenaris SA by 12.2%, from $49 to $43, while also maintaining a Strong Buy rating.

These adjustments in price targets and ratings demonstrate Lemoine's nuanced evaluation of each company's performance and outlook. While the reasons behind these specific changes were not explicitly stated in the analyst's remarks, they likely reflect Lemoine's assessment of the companies' financials, industry trends, and other relevant factors.

Looking at PTEN specifically, the consensus forecast among analysts predicts that the company will deliver earnings per share (EPS) of $1.42 in the upcoming year. If these predictions hold true, PTEN's next yearly EPS will see a substantial increase of 125.7% on a year-over-year basis. This forecast suggests a positive outlook for the company, potentially supporting Lemoine's Strong Buy rating.

However, it is worth noting that PTEN's stock has only seen a modest 3.9% increase year-over-year, lagging behind the broader S&P 500, which has surged 25.2% during the same period. This performance may raise questions about the company's ability to fully capitalize on the positive outlook provided by the consensus forecast.

Luke Lemoine, the analyst behind these ratings and price target adjustments, is ranked in the top 14% of Wall Street analysts by WallStreetZen. With an average return of 13.1% and a win rate of 58.7%, Lemoine specializes in analyzing companies within the Industrials, Basic Materials, and Energy sectors. This expertise likely contributes to the thoroughness and accuracy of Lemoine's assessments.

Patterson-UTI Energy, Inc., the company being analyzed, provides onshore contract drilling services to oil and natural gas operators both in the United States and internationally. With operations across various regions, the company offers contract drilling, pressure pumping, and directional drilling services. Additionally, Patterson-UTI Energy owns and invests in oil and natural gas assets, further diversifying its portfolio.

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