Sector Snap: Oil Service Companies Rise On Upgrade

NEW YORK (AP) — Shares of oil service companies advanced on Tuesday after an analyst upgraded the sector on an expected rebound in commodity prices and a belief that uncertainty in oilfield services stocks will decline.

Goldman Sachs analyst Daniel Boyd said his stock preference is shifting more toward more volatile stocks which have reached attractive prices and away from more defensive stocks.

Boyd upgraded Weatherford International Inc. and Halliburton Corp. to "Conviction Buy" from "Neutral." He said Halliburton is trading at a discount compared to its peers, which he believes is unjustified considering its market share and solid balance sheet.

Shares of Weatherford jumped $1.28, or 9 percent, to $15.45. Halliburton shares rose $1.01, or 5.4 percent, to $19.80.

Land drillers Nabors Industries Ltd. and Patterson-UTI Energy Inc. also received upgrades from Boyd, to "Buy" from "Neutral," based on expectations that the gas rig count will trough in the second quarter and pick up materially in 2010. Boyd said he believes natural gas production supply and demand is improving from extreme lows and that returns on these stocks could be very attractive. Even though land drillers have rallied in recent weeks, Boyd insisted that there is still meaningful upside in these names. Since the beginning of March, shares of both Nabors and Patterson-UTI have rebounded more than 50 percent.