It has been hard for investors to make some of the same gains in the oil and gas segment since oil prices have recovered handily. That may be about to change, or at least that is the take of Morgan Stanley. The firm issued a series of major upside calls for its clients looking to profit within oil and gas.

Morgan Stanley’s Connor Lynagh noted that the oilfield services companies have seen the least amount of traction during the recent energy price recovery. The long and short of the matter is that Morgan Stanley expects that higher spending is on the way from exploration and production companies, and this move is likely to boost the valuation multiples that investors are willing to pay for the group.

Lynagh’s view is that the worst is over and the services segment within oil and gas was raised to Attractive from In-Line. The expectation is a globally coordinated increase in capital spending from the upstream companies in 2020. This will be driven by higher oil prices in general and a renewed focus on new projects. To put this in perspective, Lynagh noted that this would be the first year of material positive growth globally since back in 2013.

24/7 Wall St. has featured Morgan Stanley’s top calls with Overweight ratings, but we have featured some of the less-than-enthusiastic calls as well. We also included the potential total return scenario if Morgan Stanley is correct, and we compared it with Thomson Reuters’ consensus analyst targets and recent trading histories.

As a reminder, most analyst upside targets with Buy and Outperform ratings tend to be about 8% to 10% at this stage in the bull market after nine years of gains. The Morgan Stanley view is more than twice that in implied upside potential in some of these companies.

Baker Hughes, a GE Company (NYSE: BHGE) was started as Overweight and assigned a $40 target price. The shares closed up 2% at $32.25 the prior day, and they were up almost 2% at $32.88 on Wednesday at the midday mark. This call is above-consensus, and it represents a total return opportunity of about 26%. Baker Hughes has a 52-week trading range of $25.53 to $38.10 and a consensus target price of $37.38.

Halliburton Co. (NYSE: HAL) was started with an Overweight rating and assigned a $50 price target. This call represented right at 30% in implied total return (including the dividend), and it is still not even an above-consensus target. The stock closed up 1.2% at $39.16 the prior day, and its shares were up 1.8% at $39.88 in Wednesday’s session. The 52-week range is $35.75 to $57.86, and the consensus target price is $51.97.

Transocean Ltd. (NYSE: RIG) started as Overweight with a $15 price target, which represented an implied upside call of 25% compared with the prior day’s $11.93 closing price. Elsewhere, Wells Fargo raised it to Outperform from Market Perform with an even more aggressive $16 price target, and BTIG initiated Transocean with a Buy rating and with an $18 price target just a day earlier. The stock closed up 2.9% at $11.93 on Tuesday, and it was up 3.3% at $12.33 in Wednesday’s midday trading. The 52-week range is $8.70 to $14.34, and the prior consensus price target of $12.61 ticked up to above $13 after the calls.

Nabors Industries Ltd. (NYSE: NBR) also came with an Overweight rating with a $9 price target. Its shares were last seen up 3.5% at $6.30. The consensus analyst target is $9.32, and the 52-week range is $5.32 to $8.87.

The Morgan Stanley call on oil and gas stocks may have sounded universally positive. Unfortunately for some companies, that was not the case.

Schlumberger Ltd. (NYSE: SLB) was started as Equal Weight and assigned a $72 price target. Its prior close of $60.99 was followed with a 0.3% gain to $61.17 in Wednesday’s midday reaction. Schlumberger is the industry leader in the services group, with an $85 billion market capitalization. That is more than twice the market capitalization rates of rivals Halliburton and Baker Hughes. Schlumberger has a 52-week trading range of $59.25 to $80.35, and it had a consensus target price of $76.82.

Diamond Offshore Drilling Inc. (NYSE: DO) was started with an Underweight rating and assigned a $15 target price. It closed up 3.1% at $17.85 the prior day, and it has a 52-week range of $13.00 to $21.92 and a consensus target price of $15.95.

Dril-Quip Inc. (NYSE: DRQ) was started with an Underweight rating and assigned a target price of $50 (versus a $49.80 close, after a 1.5% gain). The shares were last seen down five cents at $49.75, in a 52-week range of $37.35 and with a consensus target price of $45.13.

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