Morgan Stanley said on Wednesday it had cut ratings and price targets on five European oil service companies on fears the sector was not immune to a possible U.S. recession and global slowdown.
Analysts at the investment bank cut their rating on Expro to "neutral" from "strong buy", on Coflexip and Stolt Offshore to "neutral" from "outperform" and on Bouygues Offshore
to "outperform" from "strong buy".
They cut their price target on Geophysique by 20 percent to 80 euros from 100, but increased their target for Technip by five percent to 200 euros from 190.
Technip shares were the most attractive entry point to Coflexip exposure and had the most defensive and diverse earnings profile of the group, Morgan Stanley analysts said in a research note.
"Commodity supply fundamentals are exceptionally strong, both in the U.S. natural gas market and global oil market, but slowing demand is becoming a concern to us," they said.
OPEC cuts could become increasingly hard to implement in a falling demand environment, they added.
It was also predicted by the analysts that the European oil services stocks going forward were Saipem and IHC Caland