Dec 12 (Reuters) - Goldman Sachs cut the six-month price targets on the stocks of a clutch of oil-field services companies, saying it expects lower exploration spending by oil majors due to current commodity prices and the ongoing turmoil in the credit markets.
Also, Goldman downgraded shares of onshore drilling contractor Patterson-UTI Energy Inc (PTEN.O) to “sell” from “neutral” and said it sees 30 percent potential downside to its six-month price target.
“Even though most investors are already bracing for a significant decline in the U.S. rig count, we do not believe that the magnitude of decline that we are forecasting is fully discounted in Patterson’s stock,” the brokerage said.
Goldman, which earlier in the day predicted that oil could drop as low as $30 in the first quarter of 2009, has a “neutral” coverage view for the oil-field services sector.
“We recognize that the stocks are already down 65 percent from the peak but we see the potential for further downside in the near-term as commodity prices fall to near ‘cash costs’ in the first quarter of 2009,” a team of Goldman analysts led by Daniel Boyd wrote in a research note to clients.
COMPANY NAME RIC PRICE TARGET
Atwood Oceanics (ATW.N) $16 $21
Diamond Offshore (DO.N) $62 $75
ENSCO International (ESV.N) $29 $32
Hercules Offshore HERO.O $5 $7
Noble Corp (NE.N) $25 $26
Pride International PDE.N $16 $18
Rowan Companies (RDC.N) $14 $18
Transocean (RIG.N) $58 $79
LAND DRILLERS AND WELL SERVICES
Helmerich & Payne (HP.N) $21 $28
Nabors Industries (NBR.N) $11 $17
Patterson-UTI (PTEN.O) $8 $11
Basic Energy (BAS.N) $9 $10
Hornbeck Offshore (HOS.N) $15 $23
Tidewater Inc (TDW.N) $32 $35 (Reporting by Sakthi Prasad in Bangalore; Editing by Anne Pallivathuckal)