11:06 AM EDT, 06/03/2024 (MT Newswires) -- National Bank of Canada revisited its oilfield-services coverage group based on the relative trend of earnings, free cash and relative performance and valuation, maintaining its neutral stance and sector perform ratings across the group.

The bank's pecking order skews as Precision Drilling ( PDS ) , Trican Well Service ( TOLWF ) , Pason Systems ( PSYTF ) , CES Energy Solutions ( CESDF ) and Enerflex ( EFXT ) .

National Bank noted it knows earnings have decoupled from activity, with revenue and margins creeping higher as a function of increasing intensity of underlying activity. It also knows earnings profiles continue to support ample free cash that, in the absence of reinvestment, implies an accelerating return of capital. The group also continues to trade at an undue discount to historical and logical valuations, in support of a solid value proposition.

However, the bank does not know if or when the activity cycle might inflect to shift into the next phase of the cycle and yield a growth catalyst for valuations, while also potentially bringing dynamics that erode the value outlook.

While the bank would welcome the unknown of a growth cycle, it is "frankly happy" with the current complexion of the cycle as it relates to the quality and resilience of the group's earnings profile.

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