Story
Piper Sandler Upgrades Halliburton, Patterson-UTI on Stronger US Land Drilling Outlook
Summary
Investment bank Piper Sandler raised its ratings for Halliburton and Patterson-UTI to Overweight, citing improving U.S. land activity and a stronger long-term energy security outlook as an attractive entry point for investors.
Piper Sandler upgraded its ratings for oilfield services firms Halliburton (HAL) and Patterson-UTI Energy (PTEN) to Overweight from Neutral on Tuesday. The investment bank argued that despite recent oil price volatility, an improving outlook for U.S. land-based drilling activity creates a favorable entry point for the stocks ahead of second-quarter earnings.
Rationale for the Upgrades
The brokerage anticipates that improving U.S. drilling activity, rising hydraulic fracturing utilization, and firmer pricing will support upcoming earnings revisions. Piper Sandler identified several companies it believes are most likely to deliver "beat-and-raise" financial results for the quarter.
Key companies positioned to outperform, according to the note, include:
- Halliburton
- Patterson-UTI
- Liberty Energy
- ProPetro
For Halliburton specifically, the firm also pointed to its stake in power solutions provider VoltaGrid and recent international contract wins as additional long-term growth drivers.
Market Context and Oil Volatility
AdThe upgrades come as the oilfield services sector navigates what Piper Sandler described as a "feeling of limbo." The market has been shaped by significant oil price swings, with crude surging above $110 a barrel during recent Middle East conflicts before retreating to around $70 following a ceasefire in June.
Renewed geopolitical tensions have since pushed prices back toward the $75 mark. This volatility has made investors cautious about the remainder of 2026, but the firm believes it supports a more constructive long-term outlook for energy security and activity in 2027 and 2028.
Broader Sector View
While bullish on U.S. land-focused names, Piper Sandler expressed more caution on other parts of the sector. The bank highlighted potential risks to 2026 estimates for Weatherford International, stemming from continued disruptions in the Middle East, and for Flowco, due to higher operating costs.
However, the firm maintained a positive long-term view on the offshore services segment. It expects a coming wave of rig upgrades and stronger investment in liquefied natural gas (LNG) to support that sector over the next several years.
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