Strict capital discipline among upstream energy companies is leading to decreased demand for oilfield services, resulting in a bleak forecast for the Zacks Oil and Gas – Field Services industry, currently ranked #204 out of over 250 industries. The industry’s financial health is closely tied to the energy transition; failure to meet transition goals may worsen cash flow issues.
Key players expected to navigate these challenges include Halliburton Company (HAL), TechnipFMC plc (FTI), and Weatherford International plc (WFRD). Over the past year, the Zacks Oil and Gas – Field Services industry has performed well, increasing by 64.4%, outpacing the S&P 500’s 25.1% rise and the broader Oil – Energy sector’s 28.2% growth. The industry is currently valued at a trailing EV/EBITDA ratio of 9.62X.
With ongoing high oil prices, Halliburton, TechnipFMC, and Weatherford are well-positioned to benefit from increased upstream operations, despite the overall industry facing uncertainties related to drilling activity and capital expenditure.
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