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What's In Store for Oil Services ETFs in Q4 Earnings Season?
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Big oil services companies will start releasing their quarterly numbers from this week. The outlook is bullish this time thanks to the upbeat oil market. Let’s delve into the earnings potential of the big two oil services companies that could regulate the performance of the sector ahead.
According to our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) when combined with a positive Earnings ESP increases our chances of predicting an earnings beat, while companies with a Zacks Rank #4 or 5 (Sell rated) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Investors should note that oil prices have been among the most-typed investment words since last year. United States Oil Fund, LP (USO) has advanced 14.4% in the past one year but lost 2% this year (as Jan 13, 2022).
This year, oil prices have been dwindling as at one hand, traders are booking profits on economic slowdown talks, reopening of the Chinese economy has boosted the demand profit on the other. Coronavirus spread fear, though has been ebbing, is still vey much in place and occasionally putting pressure on oil prices.
Inside Our Surprise Prediction
Schlumberger (SLB - Free Report) is likely to report on Jan 20. SLB has a Zacks Rank #3 (Hold) and an Earnings ESP of +1.46%.
Halliburton (HAL - Free Report) is likely to report on Jan 24. HAL has a Zacks Rank #2 (Buy) and an Earnings ESP of +0.30%.
What’s in Store This Earnings Season?
As discussed above, the chances of a broad-based earnings beat are higher, thanks to higher oil prices. This has been reflected in the latest earnings estimates too, with Halliburton’s current quarter EPS estimate of $0.67 rising from $0.64 three months ago. The current-quarter EPS expectation for Schlumberger has gained from $0.64 three months ago to $0.69 now.
ETFs in Focus
Schlumberger has exposure to ETFs like iShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) (21.91% exposure), VanEck Oil Services ETF (OIH - Free Report) (19.34% exposure) and Invesco Dynamic Oil & Gas Services ETF (PXJ - Free Report) (5.19% exposure).
Halliburton too has the same exposure. iShares U.S. Oil Equipment & Services ETF (with 21.97% exposure), VanEck Oil Services ETF (with 12.22% exposure) and Invesco Dynamic Oil & Gas Services ETF (PXJ - Free Report) (with 5.14% exposure) are top three ETFs that are heavily-focused on Halliburton.
What Lies in Q1 of 2023?
Recessionary fears are rife. The Fed raised interest rates several times last year and signaled modest tightening ahead. So, even if investors can count on Q4 earnings, the outlook for Q1 may not come across as extremely upbeat.
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What's In Store for Oil Services ETFs in Q4 Earnings Season?
Big oil services companies will start releasing their quarterly numbers from this week. The outlook is bullish this time thanks to the upbeat oil market. Let’s delve into the earnings potential of the big two oil services companies that could regulate the performance of the sector ahead.
According to our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) when combined with a positive Earnings ESP increases our chances of predicting an earnings beat, while companies with a Zacks Rank #4 or 5 (Sell rated) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Investors should note that oil prices have been among the most-typed investment words since last year. United States Oil Fund, LP (USO) has advanced 14.4% in the past one year but lost 2% this year (as Jan 13, 2022).
This year, oil prices have been dwindling as at one hand, traders are booking profits on economic slowdown talks, reopening of the Chinese economy has boosted the demand profit on the other. Coronavirus spread fear, though has been ebbing, is still vey much in place and occasionally putting pressure on oil prices.
Inside Our Surprise Prediction
Schlumberger (SLB - Free Report) is likely to report on Jan 20. SLB has a Zacks Rank #3 (Hold) and an Earnings ESP of +1.46%.
Halliburton (HAL - Free Report) is likely to report on Jan 24. HAL has a Zacks Rank #2 (Buy) and an Earnings ESP of +0.30%.
What’s in Store This Earnings Season?
As discussed above, the chances of a broad-based earnings beat are higher, thanks to higher oil prices. This has been reflected in the latest earnings estimates too, with Halliburton’s current quarter EPS estimate of $0.67 rising from $0.64 three months ago. The current-quarter EPS expectation for Schlumberger has gained from $0.64 three months ago to $0.69 now.
ETFs in Focus
Schlumberger has exposure to ETFs like iShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) (21.91% exposure), VanEck Oil Services ETF (OIH - Free Report) (19.34% exposure) and Invesco Dynamic Oil & Gas Services ETF (PXJ - Free Report) (5.19% exposure).
Halliburton too has the same exposure. iShares U.S. Oil Equipment & Services ETF (with 21.97% exposure), VanEck Oil Services ETF (with 12.22% exposure) and Invesco Dynamic Oil & Gas Services ETF (PXJ - Free Report) (with 5.14% exposure) are top three ETFs that are heavily-focused on Halliburton.
What Lies in Q1 of 2023?
Recessionary fears are rife. The Fed raised interest rates several times last year and signaled modest tightening ahead. So, even if investors can count on Q4 earnings, the outlook for Q1 may not come across as extremely upbeat.