Evercore has raised its ratings on Halliburton and Helmerich & Payne to Outperform, arguing that a recent shock in energy markets is changing the supply-side calculus and improving the mid-term outlook for U.S. land oilfield services.
The brokerage says the disruption has shifted industry priorities from pure efficiency toward a renewed emphasis on security of supply. After events exposed vulnerabilities in just-in-time systems, Evercore expects governments and buyers to focus on inventory rebuilding and supply resilience, a dynamic it believes will keep crude prices higher for a longer period.
That judgment removes, in Evercore's view, a significant downside risk for energy equities - namely the prospect of crude falling back into the low $50 per barrel range due to oversupply. Instead, the firm anticipates sustained price support sufficient to facilitate inventory restocking following recent substantial draws on global stocks.
Evercore also describes a structural realignment of energy flows. The firm foresees a more regionalized set of energy systems - with the Western Hemisphere moving toward greater self-reliance and Asia strengthening ties with Gulf producers while also accelerating alternative energy development.
On the operational side, Evercore projects a modest recovery in U.S. upstream activity. The brokerage expects roughly 35 rigs to be reactivated in 2026 and forecasts North American upstream capital spending to rise about 3% year-on-year, a revision from a prior view that anticipated a 3% decline.
According to Evercore, this potential rebound marks the start of a new cycle for U.S. land services after a period characterized by falling activity, producer-driven efficiency gains and downward pressure on pricing. The firm suggests that modest growth could restore operating leverage across the sector by 2027 as activity improves.
Halliburton and Helmerich & Payne are singled out as likely beneficiaries because of their exposure to U.S. onshore drilling. Evercore expects Halliburton to show early signs of increased activity as soon as the second quarter. For Helmerich & Payne, the brokerage notes the company could offset any delays in Saudi rig deployments through reactivations in the U.S.
Evercore concludes both companies should see more stable order books and a clearer trajectory toward sustained growth in activity after several years of volatility.
Summary
Evercore upgraded Halliburton and Helmerich & Payne to Outperform, citing a supply-side shock that shifts industry priorities from efficiency to supply security, supports higher crude prices, and could catalyze a modest recovery in U.S. land services, including about 35 rig reactivations in 2026 and a projected 3% rise in North American upstream capital spending.
Key points
- Evercore upgraded Halliburton and Helmerich & Payne to Outperform based on a supply-driven change in oil markets.
- The firm expects elevated crude prices to persist as countries rebuild inventories and prioritize resilience.
- North American upstream capex is forecast to rise 3% year-on-year, and roughly 35 rigs are expected to return to service in 2026, supporting a potential recovery in U.S. land services.
Risks and uncertainties
- Duration of the current market disruption - Evercore's outlook depends on a persistent shift toward inventory rebuilding and supply resilience.
- Timing of activity recovery - the expected rig reactivations and capex recovery may be subject to delays or variability.
- Regional realignment - the projected move toward more regionalized energy systems may evolve differently than anticipated, affecting demand patterns across sectors.