Chicago, IL – May 22, 2025 – Zacks Equity Research shares Kinross Gold KGC as the Bull of the Day and BP PLC BP as the Bear of the Day. In addition, Zacks Equity Research provides analysis on SLB SLB, Halliburton HAL and Baker Hughes BKR.
Here is a synopsis of all five stocks:
I know what you're thinking. Gold stocks? In this environment? But hear me out. While the headlines are all about AI and big tech, there's an undercurrent building, one that could make Kinross Gold the golden child of your portfolio. That's why I'm naming it today's Bull of the Day.
Kinross Gold is a senior gold mining company with a diverse portfolio of mines in the United States, Brazil, Chile, Mauritania, and Canada. Unlike some of its peers, Kinross doesn't just dig holes and hope for the best. They've focused on operational efficiency, cost control, and strategic asset optimization, all of which are showing up in the numbers.
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Powered by Money.com - Yahoo may earn commission from the links above. Analysts have taken notice. Over the last 60 days, four analysts have increased their earnings estimates for the current year, and four have done the same for next year. That's the kind of revision activity that drives our proprietary Zacks Rank. The Zacks Consensus Estimate for 2024 is now sitting at $1.04, up from 77 cents just two months ago.
That might not sound like a lot, but in the world of miners where margins can be razor-thin, this kind of upside momentum is critical. Nest year's number is up from 80 cents to $1.16. That means current year EPS growth now calls for 52.94% growth while next year is expected to swell another 12.3% to $1.16.
Let's not ignore what's happening in the broader macro environment. Gold has been blasting through record highs, and while some of that's tied to short-term safe-haven demand, there's a longer-term play developing. The Fed is likely to act soon and when that happens, the dollar weakens and real yields come down, both of which are rocket fuel for gold prices.
Kinross, with its all-in sustaining costs (AISC) trending toward the lower end of the peer group, is poised to benefit disproportionately from every incremental uptick in the price of gold. If gold stays above $2,300/oz, Kinross won't just be profitable, it'll be wildly profitable.
You'd think that will all of us running to the gas station a few times a week, that energy companies would be raking in the cash. It should make the whole sector a slam dunk, especially with attractive yields. However, that simply hasn't been the case for many of these stocks. The drag of lower oil prices has been putting some pressure on these stocks. These include today's Bear of the Day, BP PLC.
BP has long tried to rebrand itself as a cleaner, greener energy company. Admirable, sure—but the market isn't rewarding ESG lip service when it comes at the expense of operational focus. While peers like Exxon and Chevron are doubling down on efficient fossil fuel production, BP has been pivoting toward renewables with mixed results. The problem? That transition isn't cheap, and it's dragging on margins.
The most glaring issue here is earnings estimate revisions. Over the last 60 days, eight analysts have slashed their forecasts for the current fiscal year. The Zacks Consensus Estimate for the current year is now down to $2.38 from $3.53. That kind of downward pressure is the kiss of death for a stock in our ranking model, pushing BP into the dreaded Zacks Rank #5 (Strong Sell) territory.
The yield is still nice though at 6.51%. There are other stocks within the Oil and Gas – Integrated – International Peers industry which are in the good graces of our Zacks Industry Rank. There are many names which are Zacks Rank #3 (Hold) stocks as well.
The oilfield services industry is once again facing a cyclical downturn, shaped by falling oil prices, reduced upstream spending, and mounting cost pressures. Companies like SLB, Halliburton and Baker Hughes have all flagged a more challenging 2025, even as a few resilient areas offer some support.
Falling Oil Prices Are Tightening Budgets: WTI's slide below $60 has triggered significant revisions to exploration and production (E&P) budgets. Independent producers like Diamondback Energy have already cut their 2025 capital budget by $400 million, while Coterra Energy plans to reduce its Permian rig count by 30% in the second half. With many shale drillers citing $65 as the breakeven point, every dollar below that takes a toll on profitability and service demand. With producer budgets under real pressure for the first time in years, drilling activity is beginning to slow, impacting oilfield service contractors across the board.
Tariff Pressures Are Fueling Cost Inflation: Trade tensions have re-emerged as a major concern. SLB warned that nearly half of its operations are exposed to tariffs, especially those involving materials shipped between the United States and China. Baker Hughes said tariffs could impact 2025 EBITDA by as much as $200 million. Halliburton projected a 2-3 cent EPS hit in Q2 alone. As equipment costs climb, margin pressure builds. the Zacks Rank #3 (Hold) firm even raised concerns about producers pushing back on higher-priced equipment, especially in U.S. land markets.
You can see the complete list of today's Zacks #1 Rank stocks here.
North America Slows, While International Recovery Wobbles: North American oilfield activity has slowed significantly, with the downturn expected to stretch into the second quarter. As a proof of this, Halliburton's revenue in the region fell 12% year-over-year to $2.2 billion in the first quarter, and lower stimulation activity and completion tool sales led to a sharp margin decline in its Completion & Production division.
Analysts now forecast rig count declines in the high-single digits and double-digit reductions in dayrates, which could compress margins by a fourth next year. The international landscape isn't faring much better. SLB reported a 5% drop in Q1 international revenues, with Latin America down 10%. Slow starts in key regions like Mexico, Saudi Arabia, and offshore Africa are weighing on recovery momentum. Reflecting this broad softness, BKR sees global spending to fall mid-to-high single-digit in 2025.
LNG and AI Data Center Demand Offer Bright Spots: Even amid the slowdown, some verticals are flashing green. LNG infrastructure and data center demand continue to attract investment. Baker Hughes expects to book at least $1.5 billion in data center-related orders over three years. These projects, less sensitive to near-term oil price volatility, are helping companies cushion the blow. Power grid upgrades and natural gas infrastructure — especially in regions like UAE, Brazil, and Asia Pacific — are likely to keep certain service pockets active.
Margin Compression May Delay Investor Interest: Despite historically low valuations, investor enthusiasm remains muted. Some drilling contractors are projected to deliver modest free cash flow yields over 2025-2026. Adding to the hesitation is the unclear timeline for the next upcycle. With margins under pressure and efficiency gains already baked in, many investors are holding back, waiting for clearer signs of stabilization before stepping back in.
The oilfield services sector seems to be caught in a downturn, with soft commodity prices, weaker producer budgets, and tariff-related inflation driving slower activity across both North American and international markets. While LNG and AI-related infrastructure offer isolated growth, the broader picture remains mixed. Companies are bracing for flat or declining revenues, cost deflation, and uncertain pricing power, suggesting that investors may need to be patient through another bumpy stretch in the cycle.
Moreover, the Zacks Oil and Gas Field Services industry currently ranks in the bottom 32% out of 245 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next few months.
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BP p.l.c. (BP) : Free Stock Analysis Report
Schlumberger Limited (SLB) : Free Stock Analysis Report
Halliburton Company (HAL) : Free Stock Analysis Report
Kinross Gold Corporation (KGC) : Free Stock Analysis Report
Baker Hughes Company (BKR) : Free Stock Analysis Report
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