Best US Energy Services Stocks: Analysts See the Best Sector Setup in 20 Years

Investing.com -- Barclays has upgraded its view on the U.S. energy services sector to Positive, citing an emerging upstream spending cycle driven by structural shifts in global oil markets.

The firm now expects upstream spending to grow 9-10% in 2027 and at least double-digit growth in 2028, compared to earlier projections of modest 3-5% growth.

Analysts at Barclays said this is the "best setup for services in 20 years."

This revised outlook follows what Barclays characterizes as an unprecedented global supply shock that has eliminated the global oil oversupply and created structurally higher oil prices.

The firm upgraded several energy services stocks, positioning them to benefit from anticipated activity increases and pricing improvements.

1. Halliburton Company (HAL) - Barclays upgraded HAL to Overweight, noting it remains the most levered among major service companies to short-cycle North American land activity.

CEO Jeff Miller’s commentary on accelerating frac attrition, horsepower exports to Saudi Arabia, UAE and Argentina, and pricing that "appears to have bottomed" support a more constructive setup into the second half of 2026.

The company’s 20% ownership stake in VoltaGrid and the joint distributed power partnership provide additional upside optionality.

Halliburton Company reported first-quarter 2026 results that exceeded expectations, prompting RBC Capital to raise its price target. The company also announced an agreement to provide integrated consulting and logistical services for Greenland Energy’s 2026 drilling campaign.

1. Patterson-UTI Energy Inc (PTEN) - PTEN was also upgraded to Overweight as the only remaining North American pure-play in the sector. PTEN’s active rig count is trending higher in the second quarter, currently at 88 rigs and expected to exit at 94, reflecting approximately 4-7 rigs being reactivated.

Barclays expects 25 or more rigs to be added to the US onshore rig count by year-end from the current 530, with PTEN positioned as a primary beneficiary.

In recent developments, Patterson-UTI Energy reported first-quarter 2026 financial results that surpassed both earnings and revenue forecasts. Following the report, Stifel raised its price target on the company, citing an improved drilling outlook.

1. Propetro Holding Corp (PUMP) - Upgraded to Overweight on signs of recovery in the Permian completion market, which should support at least 12 active frac crews and higher pricing later this year.

The company’s ProPWR business recently entered a strategic framework agreement to purchase at least 1.5GW of power generation assets with an option for 2.1GW total, expected to reach 2.6GW delivered by year-end 2031.

1. Nabors Industries Ltd (NBR) - Upgraded to Equal Weight as positive trends emerge in both US and international drilling businesses. NBR expects its active US rig count to exit the second quarter at 69 rigs versus 65 in the first quarter.

In Saudi Arabia, the company operates 53 rigs under the SANAD joint venture with minimal disruption and newbuild deployments on schedule.

Nabors Industries Ltd. announced first-quarter 2026 earnings that surpassed analyst expectations for both earnings per share and revenue.

1. Offshore Drillers (RIG, NE, SDRL) - Barclays upgraded Transocean, Noble Corporation, and Seadrill to Overweight, citing a tightening deepwater rig market. The 72 rig years of deepwater fixtures year-to-date exceeded all of last year.

Barclays raised its normalized dayrate assumption to $500,000 per day by year-end 2028, up from $460,000 per day by year-end 2027 previously.

Among the offshore drillers, Noble Corporation and Seadrill Ltd. both reported first-quarter results that beat analyst estimates, while Transocean Ltd. posted a revenue beat but missed earnings per share forecasts for the quarter.

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