Our continued Sell recommendation on Patterson-UTI (PTEN) shares reflects our expectation of a sustained softness in onshore drilling activities, resulting from a combination of commodity-price weakness, too much natural gas supply and recession-hit demand, particularly in the industrial sector.
Patterson-UTI remains particularly vulnerable to this weak macro environment given its lack of contract coverage and heavy spot market exposure.
While the company remains in strong financial health, its recent decision to cut its quarterly dividend by 69% is a prudent move to conserve capital.Zacks Investment Research
