Valens Equity Weekly Insights - 2022 12 27
Liberty Oilfield Services (LBRT) is a well-positioned vertically integrated, pure play U.S. shale E&S company. Uniform Accounting highlights the company's profitability potential during a strong shale cycle that the market is missing, indicating equity upside is warranted.Liberty spent the last several years consolidating the U.S. shale completions market, positioning itself to benefit from a surge shale production. With Russian oil coming off the market and oil demand recovering from the pandemic, Uniform ROA could accelerate back to cycle peak levels, which the market is not pricing in at all.
Liberty's management is aligned to focus on Adjusted pre-tax EPS and ROCE, which will lead management to profitably grow the business while also focusing on smart asset deployment. These metrics should drive strong ROA performance.
Management confidence in the Q3 earnings call about their strong pricing and solid employment levels support strong ROA and continued growth.
LBRT
Liberty Oilfield Services is a provider of hydraulic fracturing services to onshore oil and natural gas exploration and production companies in North America. The company provides its services primarily in the Permian Basin, the Eagle Ford Shale, the Denver-Julesburg Basin, the Williston Basin and the Powder River Basin.
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