Several analysts have recently weighed in on Basic Energy Services, Inc (NYSE:BAS), issuing notes to investors. James West of Evercore ISI released Buy rating on the stock 2month ago with a $9.00 price target, or 49.01% Upside to the last closing price.
“We believe shares have significant room to run after the stock retraced March lows. While we have espoused the view that investors should buy quality at depressed prices, we think the time is here to add beta to portfolios. While volatility may continue in the coming months as commodity prices continue gyrating up and down, we believe the long term risk reward is heavily skewed to the upside, and see BAS as a good way to gain exposure to the impending work over up cycle we see unfolding shortly and the completion levered recovery we envision unfolding in 2016/2017. We reiterate our Buy Rating. We are reducing our Price Target to $9 from $10 as we roll estimates over to 2017 and reduce our multiple to 8x from 8.25x.”
James also added, “Basic posted an adjusted EPS beat of ($1.13), above our estimate of ($1.19) and consensus of ($1.14). Revenues fell 26% sequentially, slightly worse than the company’s guidance for a 22-24% revenue decline and 6% below our forecast of $207 million, as commodity prices continued to drive reduced customer spending, further compounded by severe weather which reduced 2Q revenues by more than $10 million. Basic countered the broader macro effects by maintaining market share, optimizing the marketed fleet, and reducing input costs, headcount, and wages as the company looks to limit costs and maximize market share. Production services continue to outperform drilling and completion services as combined Well Servicing and Fluid Services revenues declined by only 13% versus the 41% decline for Completion & Remedial Services and Contract Drilling. The revenue miss was offset by higher than expected margins for Completion & Remedial Services, partially offset by lower margins for Fluid Services. ”
Another analyst at Robert W. Baird & Co. has a Neutral depending on stance on the stock. Daniel R Laben issued a note 2 month ago with a Hold rating on the stock and $8.00 price target or 32.45% upside to the last closing price.
“At 5x TTM EV/EBITDA, BAS’ valuation is below the 7x historical average. Looking forward, long-term market trends remain supportive across BAS’ core underlying markets. The still relatively young population of horizontal wells continues to mature and drive incremental demand for maintenance and heightened workover needs while an overall continuation in the shift toward unconventional activity drives demand across stimulations, fluid management, and remediation. ”
Basic Energy Services, Inc (NYSE:BAS) provides well site services essential to maintaining production from the oil and gas wells within its operating area. The company employs more than 4,400 employees in more than 100 service points throughout the major oil and gas producing regions in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas, and the Rocky Mountain and Appalachian regions.
On Sep 28, 2015 MiX Telematicsa announced that Basic Energy Services, Inc (NYSE:BAS) has renewed its contract for fleet management and driver behavior solutions for the next five years. Basic Energy Services uses solutions from MiX Telematics to help improve driver safety and monitor performance of more than 4,000 vehicles. One of the key factors in the renewal decision was MiX’s Service for Life commitment. MiX offers a comprehensive range of services, which go beyond sales, implementation and troubleshooting. It starts when a customer signs the contract and continues, holistically, until the day the contract ends. “MiX plays a crucial role in helping us meet important compliance standards such as electronic HOS and is helping to keep our drivers safe,” said Brett Taylor, VP Manufacturing and Equipment at Basic Energy Services. “Its Service for Life program is delivering the type of results we expect.”
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