Tuesday, Friedman, Billings, Ramsey upgraded Schlumberger Limited (SLB) shares to Market Perform from Underperform and increased its price target to $81 from $35.
The brokerage upgraded Baker Hughes Inc. (BHI) shares to Outperform from Market Perform and increased its price target to $69 from $33.
The brokerage upgraded Smith International Inc. (SII) shares to Outperform from Market Perform and increased its price target to $50 from $26.
The brokerage upgraded Diamond Offshore Drilling Inc. (DO) shares to Market Perform from Underperform and raised its price target to $97 from $49. The brokerage lowered its 2010 EPS estimate to $9.05 from $9.20.
Analyst Robert MacKenzie remains bullish on the oilfield services and drilling sectors in general and are upgrading several stocks based on his expectation for a rebound in EPS in 2011.
The analyst prefers oily levered names over gassy ones given the structural shift in North American natural gas supply from more productive shale gas wells that will reduce the aggregate amount of spending needed in the U.S. to replenish supplies.
The analyst's large-cap Top Pick remains Weatherford International Ltd. (WFT). In the small-cap space, the analyst is adding Key Energy Services, Inc. (KEG) to the Top Picks list to replace Core Laboratories N.V. (CLB) due to Key's higher return potential in the early part of the cycle.
The analyst is introducing his 2011 EPS, which represent a 64% average increase over 2010 estimates. For 2011, the analyst expects North American revenue to increase 25% from 2010, but this still represents a 40% decrease from 2008 levels.
The analyst said that margins should also nearly double in North America in 2011 from 2010 levels, but 2011 margins will still be half of 2008 margin levels. For 2011, the analyst expects international revenue to increase in the high teens from 2010, and be roughly flat from 2008 levels. Margins should increase slightly from 2010 levels but should still be 300-400 bps below 2008 levels.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.