Citi analyst Scott Gruber upgraded Patterson-UTI to Buy from Neutral with a price target of $18, up from $15. The upcoming recovery in U.S. drilling will likely be modest by historical standards, which is currently weighing on Patterson-UTI shares, the analyst tells investors in a research note. However, the firm believes the company’s “quality” operations and deal synergies should still drive share outperformance. Citi says Patterson-UTI offers a “top-tier” drilling business with a pumping business that “appears poised to separate from the pack post-deal.” It views the company’s free cash flow prospects as underappreciated.
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