Preston Caldwell: Over the past month, share prices for oilfield-service companies have plummeted again, approaching lows set late last December. Share prices for many names are hovering around 15-plus-year lows.
Our views on the sector have remained largely unchanged despite this drop in sentiment, and so much of our coverage list looks undervalued. We still think the market is implying expectations for oil and gas capex that are much too low. We estimate that the market-implied expectation is flat international capex growth through 2023. This manifests in several international-levered oilfield-service firms being undervalued. In particular, we highlight Schlumberger, NOV, and TechnipFMC.
To view this article, become a Morningstar Basic member.
Preston Caldwell does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.