In a new report, Citi Research analyst Scott Gruber discusses the implications that the recent 55 percent-plus rally in crude oil prices has had on the firm’s outlook for oil services stocks. While the rally has been nice for oil bulls, Gruber feels that the market may have gotten ahead of itself for several key names.

“The recent rally has left several stocks trading at recovery multiples on our 2018 estimates,” Gruber explains. “For those already reflecting recovery multiples, we expect oil betas to begin diminishing or the stocks to simply take a pause in the absence of additional catalysts near term.”

The names Gruber believes have become overheated in the short term are Forum Energy Technologies Inc FET, Patterson-UTI Energy, Inc. PTEN and Superior Energy Services, Inc. SPN. Citi downgraded each of the three stocks from Buy to Neutral.

However, the firm maintains…

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