Shares of ProPetro Holding Corp. (PUMP) plummeted 5.71% in pre-market trading on Wednesday following the company's first-quarter 2025 earnings call, which revealed a cautious outlook for the second quarter amid market uncertainties.
Despite reporting strong first-quarter results, ProPetro's management indicated a reduction in active fleets for the upcoming quarter. CEO Samuel Sledge stated, "We anticipate operating approximately between 13 and 14 fleets in the second quarter, a reduction from the 14 to 15 fleets we ran throughout the first quarter." This decision comes in response to recent declines in oil prices influenced by tariffs and OPEC+ production increases.
The company's cautious stance was further underscored by its commitment to maintaining fleet health, with Sledge emphasizing, "We are committed to maintaining the health of our fleet and will not compromise it by operating assets at subeconomic levels." This strategic approach, while prudent for long-term sustainability, appears to have dampened investor sentiment in the short term.
Adding to the downward pressure, two major financial institutions revised their target prices for ProPetro stock. JP Morgan cut its target price to $8 from $10, while Stifel reduced its target to $11 from $12. These adjustments likely contributed to the negative market reaction.
Despite the market's bearish response, ProPetro management remained optimistic about the company's long-term prospects. They highlighted the strength of their next-generation equipment, with 75% of their fleet capacity now burning natural gas, and approximately 50% of active hydraulic horsepower under long-term contracts. The company also reported progress in its ProPWR offering, securing letters of intent for long-term power generation services.
As the oilfield services sector grapples with macroeconomic headwinds, ProPetro's stock movement reflects the broader market's concerns about near-term challenges in the energy industry. Investors will likely be closely monitoring oil price trends and the company's ability to navigate the uncertain landscape in the coming months.