Oil services group Hunting PLC (LON:HTG) has been downgraded by analysts at Barclays who are nervous about the “unknowns” in the US.
Hunting’s subsea division has struggled this year, given the “low investment levels” in the US offshore and deep-water markets.
READ: Hunting swings to profit in first half
Barclays is forecasting a rise in revenues to US$892.1mln this year and a sharp jump in underlying earnings (EBITDA) to US$146.8mln.
“We feel that our numbers remain conservative and already bake in a marked slowdown in the US as we finish 2018,” read a note to clients on Wednesday.
“We still feel that there is significant potential in the company, but while issues continue in the US there will be uncertainty until February/March 2019 which could deter new investors.”
The analysts added that they expect Hunting to say it has seen little impact in the US so far when the company gives an end of quarter trading update.
“[This] should underpin our 2018F estimates, but with unknowns it feels unlikely to us that the stock outperforms.
“Hence despite 30% upside potential to our increased £10/share price target, we downgrade to ‘equal weight’ to wait out the US slowdown and wait for more positive conditions.”
Shares dropped 1.6% to 763.5p in early afternoon trading on Wednesday.