In a new note to investors on August 8, an analyst has provided a rating update for Ensign Energy Services (ESI). On August 8, analyst James West gave a Hold rating to ESI and set a C$6 price target.
West commented:
“We disagree with this logic and laud the fact that the company is maintaining a lean, go-forward capex spending program while introducing performance-based contracts into customer conversations, while implementing post-merger synergies, and while maintaining a 14% dividend yield that is covered (in our view). Then again, we maintain our In Line rating as we struggle to find clear catalysts that will take Ensign out of investor’s penalty box. The struggles of being a land-driller right now are real, and the scarlet letter of being a Canadian-based energy service company will require some time for the unwarranted label to dissipate. Like all land-drillers in our coverage, we moderate our 2019-2020 assumptions even further following 2Q19 given the cracks that have begun to show in the USL market.”
According to TipRanks.com, West has 0 stars on 0-5 star ranking scale with an average return of -9.4% and a 34.0% success rate. West covers the Basic Materials sector, focusing on stocks such as Tetra Technologies Inc, Propetro Holding Corp, and Exterran Corporation.
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Currently, the analyst consensus on Ensign Energy Services is a Moderate Buy with an average price target of C$6.29, implying an 87.2% upside from current levels. In a report issued on August 7, BMO Capital also reiterated a Hold rating on the stock with a C$5 price target.
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Based on Ensign Energy Services’ latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of C$31.17 million. In comparison, last year the company had a GAAP net loss of C$36.7 million.
Ensign Energy Services, Inc. engages in the provision oilfield services. It includes drilling and well servicing, oil sands coring, directional drilling, underbalanced and managed pressure drilling, equipment rentals, transportation, wireline services, and production testing services.
The company’s shares closed on Friday at C$3.36, close to its 52-week low of C$3.15.
