Barclays spies bottom of the cycle for European oilfield services

Analysts at Barclays Research reiterated their 'positive' view on the European Oil Services&Drilling sector, taking issue with the fact that it had traded as a proxy for the oil price even as major projects have begun to come to market, so that activity for the beginning of the following decade was firming up.

The group was down by 15% from their 2018 high water mark and over the most recent three-month stretch had underperformed the price of oil by 2%.

But in the opinion of Barclays, "nothing has fundamentally changed over that period."

If anything, break-evens had much reduced over that time span, helping projects and they were now materialising as awards.

"We expect this to continue through the year, enabling us to draw a line under the bottom-of-the-cycle and then face a steady upturn," they said

And trading on an enterprise value-to-earnings before interest, taxes, depreciation and amortisation multiple of 6.5 times, that potential had yet to be reflected in companies' share prices, hence their positive view on the sector.