Oil & Gas - Energy - Commodities - Resources (OILBRENT)

[benfrankledger]

$PTEN Patterson-UTI Energy (PTEN +3.1%) is higher after BMO Capital upgrades shares to Outperform from Market Perform with a $26 price target, noting the stock's ~20% fall since PTEN's Q4 earnings release.

BMO believes PTEN's fundamentals are improving, and management's commentary of adding up to 200 rigs at year-end compared to 2017 implies the potential for upside to consensus estimates in H2 2018.

While the absence of a dividend increase was disappointing, BMO says the ensuing selloff was unwarranted, and the firm estimates PTEN's free cash flow yield for 2018 at 3.7%, which would rank it as one of the highest within the land-drilling space and possibly causing a 50% dividend increase in the future.