TSX:CET - Post Discussion
Post by
auburn2 on Nov 10, 2020 12:28pm
Fellow US directional driller PHX is running
The Globe and Mail reports in its Friday edition that ATB Capital analyst Tim Monachello upgraded PHX Energy Services to "outperform" from "sector perform." The Globe's David Leeder writes that Mr. Monachello made the rating change after the company post "strong" third quarter results. He says PHX's ability to generate free cash is a validation of its "defensive" business model. Mr. Monachello says in a note: "The beat versus our estimate was largely a result of stronger activity and activity mix in PHX's U.S. operations, where its market share grew to a new high-water mark at roughly 8.5 per cent (ATB calculation), up from 6.6 per cent in Q2/20, and 4.8 per cent on average in 2019. In our view, the resiliency of PHX's U.S. operations through the down cycle is a testament to the quality of its high-performance fleet, and an indication of its strong competitive positioning. Our formal estimates include a normalization in market share as industry activity rebounds through 2022, though this may prove conservative. ... We believe PHX is well positioned for potential organic high-performance fleet additions." Mr. Monachello boosted his share target to $2.50 from $2. Analysts on average target the shares at $1.83.
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