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Helmerich & Payne (HP) , an oil services firm, was downgraded at Goldman Sachs today to "Sell" from "Neutral" with a $45 price target.

Shares of the Tulsa-based firm were declining over 4% during afternoon trading on Tuesday following the downgrade. 

Goldman analysts Waqar Syed and Viswa Sandeep Sama contend that pressure pumping prices should continue to increase, while rig prices should "plateau," making Helmerich & Payne less profitable than sand stocks.

"In our view, HP stock is reflecting significantly higher dayrate assumptions. We believe that daily rig margins should stabilize in the $7,000-$7,500/day range (below our previous estimate of $10,000/rig-day) as rig count flattens out," they wrote.

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"On EV/EBITDA and P/NAV, HP now appears to be significantly more expensive than the peer group, trading at 11.9x 2018 EBITDA versus 7.4x for its land drilling peers," the analysts continued.

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