After a Tough Year, Oil Services Companies are Set to Report Earnings Results
The oil services industry got hit as hard as any during the first quarter of 2020. Many of the stocks fell over 50%. The stocks have since rebounded and a number of them are trading at or near the same levels they were at before the meltdown.
Three of the biggest companies in the industry will report earnings next week and all three are expected to see significant declines in their EPS compared to 2019.
Halliburton (HAL) is scheduled to report on January 19, Baker Hughes (BKR) will report on January 21, and Schlumberger (SLB) will report fourth quarter results on January 22.
If you look at the weekly charts of all three stocks, all three are in overbought territory based on their 10-week RSIs and the weekly stochastic indicators. The stocks rallied off the March lows, dropped back down in the fall and have rallied again since October. The questions is, can the stocks keep the rally going with earnings expected to be down compared to last year’s results?
I put together the following table to show where the EPS estimates are for each company and how that compares to Q4 2019 and to the third quarter. As you can see, Baker Hughes is expected to see a pretty big jump from quarter to quarter, but it’s still expected to report a decline of 40.7% compared to last year.
Halliburton is expected to see a 36.4% increase in EPS on a quarter over quarter basis, but a 53% drop compared to the same time period of 2019. Schlumberger is expected to see a small decline on a quarter over quarter basis and a 56.4% decline compared to Q4 2019.
Tickeron’s AI Platform has Baker Hughes rated as a “sell”. Halliburton is rated as a “buy” and Schlumberger is rated as a “strong buy”. On the fundamental analysis screener, each of the companies gets three poor readings. Baker Hughes and Schlumberger each get two positive readings, both being the Outlook Ratings and the Valuation Ratings. Halliburton doesn’t have any positive readings. All three stocks have poor SMR Ratings and all three get a 100 in the Profit vs. Risk Rating. That’s the worst score a company can get.
The stocks fare much better on the technical analysis screener. Baker Hughes has four bullish signals and one bearish signal currently active. Halliburton has four bullish signals and two bearish signals. Schlumberger has two bullish signals and one bearish signal. The areas where we see a consensus are bullish signals for all three stocks from the MACD indicators and the Momentum indicators. All three received bearish signals from the Bollinger Bands within the past five days.
It will be interesting to see how investors react to the earnings reports after rallying so sharply over the last few months. For the complete analysis from Tickeron on how the three stocks compare to one another and other stocks, continue reading.
Momentum Indicator for OIH turns positive, indicating new upward trend
OIH saw its Momentum Indicator move above the 0 level on January 02, 2025. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 79 similar instances where the indicator turned positive. In of the 79 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where OIH's RSI Oscillator exited the oversold zone, of 28 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for OIH just turned positive on January 02, 2025. Looking at past instances where OIH's MACD turned positive, the stock continued to rise in of 38 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where OIH advanced for three days, in of 315 cases, the price rose further within the following month. The odds of a continued upward trend are .
OIH may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
OIH moved below its 50-day moving average on January 08, 2025 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for OIH crossed bearishly below the 50-day moving average on December 16, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 18 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where OIH declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for OIH entered a downward trend on January 02, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
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Category Energy