An unstable price environment for goods promoted by increasing trade voltage and strict capital management caused by higher energy companies reduces the demand for oil field services by creating a complex perspective of the Zacks oil and gas outdoor service industry. Companies in this sector must properly navigate the developing energy transition to success. Failure to bring energy transitional goals, their cash flows can adversely affect.
Between industrial companies that can survive business challenges Technipfmc Fti, Oceaneering International, Inc. Oii and Helix Energy Solutions Group, Inc HLX.
About the industry
The Zacks Oil and Gas Outdoor Service Industry consists of companies that first provide support services to research and production players. These companies help to manufacture, repair and maintain wells, drilling equipment, leasing of drilling platforms, seismic testing and transport and direction solutions, among other things. In addition, companies help energy players determine oil and natural gas, as well as drilling and evaluating hydrocarbon wells. Thus, the oil deposit service business is positively correlated with expenses from the upstream companies. In addition, when the countries of the world invest greatly in liquefied natural gas (LNG) terminals, several oil field services companies expand their accessibility outside the boundaries of hydrocarbon fields and use contracts for manufacturing equipment used on LNG devices to reduce carbon emissions.
3 Trends defining the future of the oil field services industry
Effect of volatile oil and gas prices: Demand for oil field services is mainly related to research and production activities, as companies help the players above to effectively establish oil and gas wells. Given the dependence of oil researchers and producers on the volatile and uncertain landscape of the prices of goods, which currently affects the constant trade voltage of the US and China, the business of oil deposits such as SLB and Halliburton is sensitive to uncertainty.
Lower costs upstream: Although the prices of goods prices remain favorable for research and production operations, shale game wells are much lower, unspugbasable prices, drilling, which may continue when the players above the players prefer shareholders’ return rather than increase their production. The reduction of drilling activities indicates a lower demand for oil field services, as companies such as SLB and Halliburton, which primarily help the operators above to establish oil and gas wells have a negative impact on this shift.
Money transition goals failed the effect of cash flow: The prosperity of industrial enterprises is highly dependent on their suitability in the browsing developing energy transition landscape. This includes the ability of oil and gas operations to be effectively addressed by oil and gas operations, while expanding the adoption of ingenious, low -carbon and carbon and carbon neutral technologies. Therefore, failure to achieve energy transitional goals will affect cash flow.
The Zacks industry rank shows Bearish Outlook
Zacks oil and gas outdoor services are 22 shares in the wider Zacks oil and energy sector. Currently, the industry is occupied by the Zacks industrial rank #220, which includes it to the bottom 11% more than 250 Zacks Industries.
The rank of the Zacks industry, which is essentially the average of all members’ shares in Zacks, shows gloomy prospects for the nearest. Our study shows that 50% of the Zacks industries are 50% over 50% compared to more than 2 to 1.
Let’s look at the latest industrial stock in the market and an image of evaluation before submitting some of the shares you can consider.
Industrial retardation S&P 500 and sector
The Zacks Oil and Gas Field Service Industry has been behind the Zacks S&P 500 Composite and the wider Zacks oil – energy sector in recent years.
The industry fell 11.9%over this period compared to the S&P 500 increase by 12.9%and the wider sector 3%improvement.
One -year price performance
Current industrial assessment
Because oil and gas companies are overloaded with debt, it makes sense to evaluate them based on EV/EBITDA (company value/earnings before interest tax depreciation and amortization). This is because the assessment metrics take into account not only the property but also the debt level. EV/EBITDA is a better assessment metric for capital companies, as it is not influenced by changing capital structures and disregard for cash money.
Based on the 12 -month EV/EBITDA, the industry is currently selling 5.95x compared to the S&P 500 17.59x and the sector 4.79x.
Over the past five years, the industry has been trading as much as 12.87x and 1.19x and the median 8.11x.
12 months of company value and EBITDA (EV/EBITDA) ratio
3 actions of oil field services trying to survive industrial challenges
International ocean
Oceaneering is a well -known service provider and robotic solutions for seafood players. The first 2025 The quarter Oii was a large flow of new business, while ensuring about $ 1.2 billion worth of new orders. Currently, Oceaneering is a Zacks rating no. 2 (buy).
Price and consensus: Oii
Helix Energy Solutions
Although Helix Energy provided special services to the seafood industry, the first in 2025. The quarter ended in about $ 1.4 billion. Thus, HLX protects stable cash flows for the coming months. Helix Energy, carrying Zacks rating no. 3 (HOLD), also known for its proactive cost management and strong capital costs.
Price and consensus: HLX
Technipfmc
The Technipfmc has a very strong possible work pipeline, which is expected to undergo more than $ 26 billion -worth underwater projects in the coming years. This provides future Zacks #2 FTI cash flow. You can see Detailed list of today’s Zacks #1 rank(Strong to buy) stock here;
Price and consensus: FTI
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Technipfmc Plc (FTI): Free Stock Analysis Report
Oceaneering International, Inc. (OII): Report of free stock analysis
Helix Energy Solutions Group, Inc. (HLX): Free Stock Analysis Report
This article was originally published on Zacks Investment Research (zacks.com).
