Raymond James downgrades Precision Drilling to Outperform on estimate cuts

Raymond James downgraded Precision Drilling (PDS) to Outperform from Strong Buy with a price target of C$124, down from C$141. The firm brought down its U.S. active rig count, day rate, and day margin estimates, and now sit below consensus for Precision Drilling. The analyst acknowledges the headwinds drilling faces in a lower commodity price environment, and the risk that commodity prices move lower, but it believes Precision shares have “been aggressively punished.” Investors are more than compensated for the “extra risk” at this share price, the analyst tells investors in a research note.