Any time a commodity-based sector sees a huge fall in the price of the commodities that are the core of its sector, one thing is sure to happen. The lower level players are taken offline and the bigger players go into survival mode. That’s exactly what has happened in the oil industry, and finally the huge drop in the rig count is having an effect. In fact, the International Energy Agency is predicting 2016 will see the biggest fall in non-OPEC production in the past 25 years (almost 700,000 barrels per day), helping rebalance a market that has been dogged by oversupply.

In a new research report, Deutsche Bank notes that the exploration and production companies spent very little in capital expenditures in the first quarter. The reality is there is very little room for management teams to continue cuts after over a year of slashing them. The Deutsche Bank team thinks that ultimately customers will begin to spend some money after coming off of such an abnormally low start to the year, and they think much of that will be production related spending.

Subsequently, the firm is raising targets on some of its top stock to buy. Four companies are lifted, and they may be solid purchases now for aggressive growth accounts.

Forum Energy Technologies

This is a lesser known company that has solid upside potential. Forum Energy Technologies Inc. (NYSE: FET) is a global oilfield products company, serving the subsea, drilling, completion, production and infrastructure sectors of the oil and natural gas industry. Its products include highly engineered capital equipment, as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas.

Other analysts on Wall Street also have been positive on the stock, and their thesis is similar to the analysts at Deutsche Bank. Spending and oil price have bottomed, and Forum is one of the companies that will benefit from an uptick in spending going forward.

The Deutsche Bank price target was raised to $17 from $12. The Thomson/First Call consensus target is $13.79. The shares closed Thursday at $14.69.

Nabors Industries

This company provides drilling and rig services. Nabors Industries Ltd. (NYSE: NBR) offers rig instrumentation, optimization software and directional drilling services. It also provides completion, life-of-well maintenance and plugging and abandonment of a well. In addition, the company markets approximately 466 land drilling rigs for oil and gas land-based drilling operations in the United States, Canada and approximately 20 other countries worldwide; approximately 445 rigs for land well-servicing and workover services in the United States; 98 rigs for land well-servicing and workover services in Canada; 42 rigs for offshore drilling operations in the United States and internationally; and seven jackup units and components of trucks and fluid hauling vehicles.

Nabors investors receive a 2.3% dividend. Deutsche Bank raised its price target to $13 from $10. The consensus price objective is $10.72. Shares closed Thursday at $10.45.

Patterson-UTI Energy

This company could see meaningful business coming from Canada this year. Patterson-UTI Energy Inc. (NASDAQ: PTEN) subsidiaries provide onshore contract drilling and pressure pumping services to exploration and production companies in North America. Patterson-UTI Drilling Company and its subsidiaries operate land-based drilling rigs in oil and natural gas producing regions of the continental United States and western Canada. Universal Pressure Pumping and Universal Well Services provide pressure pumping services primarily in Texas and the Appalachian region.

The stock has been on a solid roll since late January, and the outperformance could be attributed to good execution and reduction in the cost structure. Other Wall Street analysts have noted that the company’s pressure pumping margins improved substantially.

Patterson-UTI investors are paid a 2.13% dividend. The Deutsche Bank price target moved to $29 from $17, and consensus target is $17.86. The stock closed Thursday at $18.71.

Superior Energy Services

Superior Energy Services Inc. (NYSE: SPN) serves the drilling, completion and production-related needs of oil and gas companies worldwide through its brand name drilling products and its integrated completion and well intervention services and tools, supported by an engineering staff who plan and design solutions for customers.

The company is one of Wall Street’s favorite small mid-cap stocks to play the U.S. land services recovery, and analysts think investors should see the impact of cost reductions as this year progresses, which some feel could help offset pricing pressure. The sector downturn has led to reductions in capex and capacity attrition, a positive for the survivors like Superior, that have managed both extremely well in a very difficult environment.

Superior investors are paid a 2.1% dividend. The Deutsche Bank price target was raised to $16 from $15, and the consensus target is $15.52. The stock closed Thursday at $15.25.

Anytime Wall Street firms raise price targets, that is generally a bullish sign. While some of it is playing catch-up, the size of some of the analysts changes here are substantial. That could bode well for investors buying shares now.

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