On Tuesday, Schoeller-Bleckmann Oilfield Equipment AG (SBO:AV) (OTC: SBOEY) saw its stock rating change as Kepler Cheuvreux adjusted its stance on the company from Buy to Hold. The firm also revised its price target for the oilfield service provider to €35.00, a significant decrease from the previous target of €57.00.
The downgrade comes as Kepler Cheuvreux anticipates a challenging environment for Schoeller-Bleckmann due to a lower oil price assumption of $60 per barrel. The firm expects this scenario to exert pressure on the company's activities in the United States, with potential declines in both volumes and pricing.
The revised outlook by Kepler Cheuvreux reflects concerns about the impact of the current oil market on Schoeller-Bleckmann's business strategy, including its diversification efforts. Market observers may also speculate about the future of shareholder remuneration as the company navigates through these headwinds.
In a statement, Kepler Cheuvreux cited the anticipated impact of market conditions on Schoeller-Bleckmann's performance as the reason for the adjustment in their financial model and valuation. The new price target of €35.00 represents a significant cut from the previous €57.00, indicating a more conservative expectation of the company's stock value.
The hold rating now suggests that Kepler Cheuvreux advises investors to maintain their current position in Schoeller-Bleckmann shares without increasing their holdings. This comes as the market awaits to see how the company will manage the predicted downturn in US activity and address the concerns raised regarding its strategy and shareholder returns.
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