JPMorgan Reiterates Neutral Rating on Liberty Oilfield Services (LBRT)

JPMorgan analyst Sean Meakim reiterated a Neutral rating and $25.00 price target on Liberty Oilfield Services (NYSE: LBRT).

The analyst comments "At our recent energy conference, LBRT acknowledged softer activity trends in 2Q24. As a reminder, LBRT guided to flattish YoY EBITDA in 2024 relative to ~$1.2bn in 2023, but noted how frac demand had dropped a bit more than the company expected when they initially released their guide back in January 2024. While the company’s fleet count has only declined by 1 to ~41 fleets, LBRT is observing a higher level of calendar white space given the looseness in the market. The bulk of LBRT’s fleets operate under dedicated agreements, which typically have some natural gaps in the frac schedule. When the market is tight, LBRT is generally able to fill those gaps in the schedule, but less so in softer periods like today, resulting in lower effective utilization. We are modeling a softer print, with 2Q24 EBITDA estimate of $265mm coming in below consensus of $273mm. Despite the softer activity environment, LBRT echoed similar commentary from its peers that pricing for natural gas burning equipment remains resilient. Given the fact that the BKR rig count has now declined to early 2022 levels (U.S. land count down 42 rigs YTD to 560 rigs), we suspect that the trajectory of NAM spending in 2H24 could be trending a bit below plan for NAM levered OFS companies. We are now modeling 3Q24 and 4Q24 EBITDA of $268mm and $253mm, which are -8% and -4% below consensus estimates of $292mm and $264mm, respectively."

For an analyst ratings summary and ratings history on Liberty Oilfield Services click here. For more ratings news on Liberty Oilfield Services click here.

Shares of Liberty Oilfield Services closed at $20.26 yesterday.

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