Canaccord upgrades Hunting in anticipation of multi-year cycle for oilfield services

Analysts at Canaccord Genuity upgraded their rating for shares of Hunting from 'hold' to 'buy' following the recent sharp spill lower in the share price after the company posted its second quarter results.

In a research noted date 6 July, analyst Alex Brooks explained that the share price fall was due to investors' overly elevated expectations.

Consensus had been anticipating full-year 2022 earnings before interest, taxes, depreciation, and amortisation of $48-80.0m, whereas the company guided towards $45-50.0m.

Nonetheless, the oilfield services outfit's second quarter trading was described as "robust", what with a "strong" increase in the revenue run-rate for Q2, robust cashflow and an almost 50% jump in its backlog.

More importantly, Brooks said he was "increasingly confident in a multi-year cycle for the oil services industry, primarily due to nearly a decade of under-investment and an increasing near-term need for fossil resources."

He also noted that the company's "notoriously low visibility" meant that there might still be upside to its 2022 numbers.

Brooks did however keep his target price unchanged at 300.0p.