Investors who equate the international opportunity for oilfield services with the potential suggested by the budgets of U.S. shale producers and certain supermajors, whose capex spending plans are largely flat, may miss out on the broader cyclical upside, warned analysts with Morgan Stanley.

The analysts see international upstream spending on the rise largely driven by national oil companies (NOCs), which they believe will reverse gains in market share made by U.S. E&Ps during the shale revolution. Investors, however, are not yet taking this positive outlook of rising spending into account toward oilfield service stocks, according to a report released by Morgan Stanley Research in early April.

Morgan Stanley analysts see the misconception creating an international opportunity for oilfield service stocks with their top pick being TechnipFMC Plc. Also mentioned were Tenaris, Baker Hughes Inc., Transocean, Borr Drilling, Petrofac, Saipem, Subsea 7, Sembcorp Marine, Samsung Engineering, Larsen & Toubro, Hilong, Nabors, JGC and Modec.

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