Wall Street closes at a record for the first time since end of January
Investing.com - Piper Sandler analyst Derek Podhaizer identified three favored oilfield services stocks and three others for caution as the sector navigates oil price volatility tied to the US/Israel-Iran conflict.
The firm highlighted TechnipFMC (NYSE:FTI), National Energy Services Reunited (NASDAQ:NESR), and ProPetro (NYSE:PUMP) as preferred picks heading into earnings season. TechnipFMC remains Piper Sandler’s highest conviction name despite significant outperformance, with management reiterating its $10 billion order target for 2026 and expectations for orders to increase in 2027.
National Energy Services Reunited has faced pressure since the conflict began due to Middle East exposure, but onshore Saudi Arabia activity has remained essentially uninterrupted. ProPetro came under pressure last quarter due to lack of capacity expansion and AI data center announcements, but Piper Sandler expects announcements from its ProPWR unit to drive investor interest.
The firm expressed caution on RES, ACDC, and NOV. RES and ACDC have significantly outperformed since the beginning of the conflict, but no indication of an activity response by exploration and production companies has emerged as the rig count remains unchanged year-to-date.
NOV faces headwinds as 15-20% of revenue comes from the Middle East, including exposure to offshore Saudi Arabia with a meaningful after-market component likely to result in elevated decrementals. High logistics costs are also likely to weigh on margins, according to Piper Sandler.
In other recent news, Solaris Energy Infrastructure has amended its senior secured term loan agreement to increase total available commitments by $200 million. The amendment, involving Goldman Sachs Bank USA as the administrative and collateral agent, adds to the existing $300 million in term loans. Additionally, Solaris Energy Infrastructure has closed two transactions that will add approximately 900 MW of natural gas-fueled turbine capacity between 2026 and 2029. This includes the acquisition of Genco Power Solutions, contributing 400 MW, and the purchase of 30 turbine delivery slots for 500 MW.
Furthermore, Stifel has reiterated its Buy rating on Solaris Energy Infrastructure following the gas turbine acquisition, maintaining a price target of $71.00. Wells Fargo has initiated coverage on the company with an Equal Weight rating, also setting a price target of $71.00. The firm noted Solaris’s operational track record and contracts with two hyperscalers as key factors. Wells Fargo estimates the company’s unit profitability at around 20%, which is within the range for traditional industrial equipment solutions providers. These developments reflect Solaris’s strategic moves and analyst perspectives in the energy infrastructure sector.
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