Halliburton
HAL
$33.64
-1.15%
Halliburton Company is the largest North American oilfield-services provider by market share, operating across the full reservoir-to-wellbore value chain with core offerings in hydraulic fracturing and completions, drilling and evaluation fluids, directional drilling, and cementing services for upstream oil and gas producers. The company is distinct in that it holds a commanding leadership position in the hydraulic fracturing and completions market — which accounts for nearly half of total revenue — while maintaining strong secondary positions in drilling fluids and material science, positioning it as the premier North American completions specialist relative to global peer SLB. The current investor narrative is dominated by the tension between geopolitical oil-supply shocks — including Strait of Hormuz disruptions that briefly spiked crude prices — and the subsequent 'peace trade' de-escalation that pressured energy equities, alongside Halliburton's strategic pivot toward international growth markets such as Argentina's Vaca Muerta shale and a major Indonesia deal to revive aging oil fields. Management's ability to offset North American completions softness with international contract wins and margin-accretive technology deployments is the central debate, with recent earnings showing a return to profitability after a severely depressed Q3 2025. The stock has been a notable outperformer over the trailing year, though recent consolidation reflects investor uncertainty about the durability of the international growth pivot amid volatile commodity prices.…
HAL
Halliburton
$33.64
Related headlines
Investment Opinion: Should I buy HAL Today?
We rate HAL a Buy, anchored by the analyst consensus of Buy (mean 1.75) and an average target price of $43.12, which implies 20.3% upside. The core thesis is that Halliburton is a high-quality completions leader trading at a discounted forward PE of 12.35x, with an earnings recovery expected to drive significant multiple expansion as international growth offsets North American weakness.
The supporting evidence is compelling: revenue is stabilizing around $5.4-$5.7 billion per quarter, and Q1 2026 net income of $461 million marked a sharp recovery from the Q3 2025 trough. The balance sheet is solid with a current ratio of 2.04 and debt-to-equity of 0.777, while TTM free cash flow of $1.678 billion supports a 2.44% dividend yield. The forward PE of 12.35x is below the trailing PE of 18.72x, reflecting expected EPS growth to $4.13, and the PS ratio of 1.07x is near the low end of its historical range. Analyst sentiment is improving, with two upgrades in the past five months.
Key risks include continued margin compression (gross margin at 14.62% vs. 18.29% a year ago), execution risk on the international pivot, and the possibility that oil prices decline, reducing drilling activity. The rating would upgrade to Strong Buy if gross margins recover above 16% and international revenue growth accelerates, or downgrade to Hold if revenue declines further or FCF fails to cover the dividend. Relative to its own history and peers, HAL appears undervalued on a forward earnings basis but fairly valued on trailing metrics.
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HAL 12-Month Price Forecast
Halliburton presents a compelling risk/reward for investors willing to look past near-term North American weakness. The stock trades at a discounted forward PE of 12.35x, and the international pivot (Indonesia, Argentina) provides a credible path to offset domestic headwinds. However, the recovery hinges on margin improvement and execution, and the wide analyst target range ($29-$53) reflects uncertainty. We are bullish with medium confidence, as the low beta (0.769) and strong relative performance (60.65% 1-year gain) suggest the market is rewarding the strategy. We would upgrade to high confidence if gross margins recover above 16% and revenue growth turns positive; we would downgrade to neutral if oil prices fall below $65 or international contracts fail to materialize.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Halliburton's 12-month outlook, with a consensus price target around $43.24 and implied upside of +28.5% versus the current price.
Average Target
$43.24
0 analysts
Implied Upside
+28.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$29 - $53
Analyst target range
Halliburton is covered by 25 analysts with a consensus recommendation of 'Buy' (mean rating of 1.75 on a 1-5 scale where 1 is Strong Buy), reflecting broad bullish sentiment. The average price target of $43.12 implies approximately 20.3% upside from the current price of $35.84, a meaningful premium that suggests analysts see substantial value in the shares at current levels. The consensus leans clearly bullish, with the recommendation mean of 1.75 indicating that the majority of analysts rate the stock a Buy or equivalent, and the estimated forward EPS average of $4.13 — versus the trailing EPS of $0.054 — implies analysts expect a dramatic earnings recovery that would bring the forward PE down to 12.35x.
The target price range spans from a low of $29.00 to a high of $53.00, a spread of $24.00 or approximately 83% of the low target, signaling significant disagreement among analysts about the company's trajectory. The high target of $53.00 implies roughly 48% upside and likely assumes successful execution on international growth initiatives, margin recovery in completions, and a favorable oil price environment that sustains North American activity. The low target of $29.00 implies approximately 19% downside and likely prices in continued North American pricing pressure, margin compression, and a potential oil price decline that would reduce drilling activity. Recent institutional ratings show a constructive trend: Piper Sandler upgraded to Overweight from Neutral on July 14, 2026, and Barclays upgraded to Overweight from Equal Weight on May 8, 2026, while Susquehanna, Citigroup, JP Morgan, Stifel, and RBC Capital all maintained positive ratings. The absence of recent downgrades and the presence of two upgrades over the past five months suggest analyst sentiment is improving, though the wide target spread indicates that conviction on the timing and magnitude of the recovery remains uneven.
Bulls vs Bears: HAL Investment Factors
The bull case rests on a powerful earnings recovery narrative: analysts expect EPS to surge to $4.13, driving the forward PE down to 12.35x, and the international pivot offers a credible path to offset North American weakness. The bear case highlights stagnant revenue, severe margin compression, and earnings volatility that make the recovery uncertain. Currently, the bull evidence is stronger because of the low beta, strong relative performance, and clear analyst optimism, but the single most important tension is whether the international growth (Indonesia, Argentina) can sustainably replace lost North American completions revenue and restore margins above 15%. If that pivot fails, the stock could retest its 52-week low of $21.46; if it succeeds, the high target of $53 is achievable.
Bullish
- Analyst consensus strong buy with 20% upside: 25 analysts rate HAL a Buy with a mean recommendation of 1.75 (1=Strong Buy), and the average price target of $43.12 implies 20.3% upside from the current $35.84. Recent upgrades from Piper Sandler (July 14) and Barclays (May 8) signal improving sentiment, and the high target of $53.00 suggests 48% upside if international growth accelerates.
- Forward PE of 12.35x prices recovery: The forward PE of 12.35x is well below the trailing PE of 18.72x, implying analysts expect EPS to jump from a distorted trailing $0.054 to $4.13. This wide gap reflects the market's expectation of a sharp earnings rebound as one-time charges (e.g., Q3 2025's $442M other expenses) fade and international mix improves.
- International pivot gaining traction: Halliburton's major Indonesia deal to revive aging oil fields and its strategic focus on Argentina's Vaca Muerta shale provide long-term growth avenues outside the pressured North American completions market. These wins diversify revenue and could drive margin expansion as higher-margin international work replaces domestic pricing weakness.
- Solid balance sheet and cash generation: Current ratio of 2.04 and debt-to-equity of 0.777 indicate ample liquidity and moderate leverage. TTM free cash flow of $1.678 billion supports the 2.44% dividend yield and $100 million in quarterly buybacks, though FCF was only $81 million in Q1 2026 due to working capital swings.
Bearish
- Revenue stagnation and margin compression: Q1 2026 revenue of $5.402 billion was down 0.28% year-over-year, continuing a multi-quarter drift from the Q2 2024 peak of $5.833 billion. Gross margin has fallen to 14.62% from 18.29% in Q4 2024, and operating margin has compressed to 12.57% from 16.61%, reflecting pricing pressure in North American completions.
- Earnings volatility and quality concerns: Q3 2025 net income collapsed to $18 million (0.32% net margin) due to $442 million in other expenses and a 90.9% effective tax rate, while Q1 2026 recovered to $461 million. This volatility, driven by one-time items and tax anomalies, makes trailing earnings unreliable and raises questions about earnings quality.
- North American completions headwinds persist: Completion and Production, 55.8% of revenue, faces continued pricing pressure and lower activity as producers prioritize capital discipline. The segment's weakness is the primary drag on margins, and without a rebound in North American drilling, overall profitability may remain subdued.
- Wide analyst target spread signals uncertainty: The target range spans $29.00 to $53.00, an 83% spread from the low, indicating significant disagreement on the recovery's timing and magnitude. The low target implies 19% downside, reflecting risks of continued margin erosion and a potential oil price decline.
HAL Technical Analysis
Halliburton is in a sustained recovery uptrend that has carried the shares 60.65% higher over the trailing twelve months, dramatically outpacing the S&P 500's 16.22% gain over the same period. At a current price of $35.84, the stock is trading at approximately 65% of its 52-week range (low of $21.46, high of $43.59), placing it in the upper-middle portion of its annual band but well below the highs. This positioning suggests the stock retains positive momentum from the broader recovery but has ceded significant ground from its peak, reflecting a market that has grown more cautious on the energy services cycle even as the longer-term trend remains constructive. The 52-week low of $21.46 represents a 40% drawdown from current levels, underscoring the magnitude of the recovery that has unfolded over the past year.
Short-term momentum presents a mixed picture: the stock has gained 7.66% over the past month, strongly outperforming the S&P 500's -1.06% decline, translating to a relative strength of +8.72 percentage points. However, the three-month change of -9.49% reveals a sharp deceleration from the one-year trend, with relative strength versus the S&P 500 at -12.53 percentage points over that period. This divergence — positive one-month momentum against negative three-month performance — suggests the stock may be forming a near-term bottom after a corrective phase, with the August rally from the $31.19 low (July 29) to $37.63 (September 2) representing a meaningful recovery attempt. The six-month change of +6.38% further confirms that the intermediate-term trend is consolidating rather than collapsing, though the stock has pulled back from its early-September highs near $37.63 to the current $35.84.
Key technical support is anchored at the 52-week low of $21.46, with a more immediate support zone around $31.00-$32.00 where the stock consolidated in late July and early August 2026. Resistance is defined by the 52-week high of $43.59, with intermediate resistance near $37.63 (the September 2 high) and the $40.00 psychological level that capped the April-May rally. A breakout above $37.63 would signal renewed bullish momentum and open a path toward the $40-$43 range, while a breakdown below $31.00 would threaten the recovery trend and potentially retest the $27-$28 area. With a beta of 0.769, Halliburton is approximately 23% less volatile than the broader market, which is notable for an energy services stock and suggests that position sizing can be somewhat more aggressive relative to higher-beta energy peers, though the 27.43% maximum drawdown over the period underscores that this is not a low-risk holding.
Beta
0.77
0.77x market volatility
Max Drawdown
-27.4%
Largest decline past year
52-Week Range
$21-$44
Price range past year
Annual Return
+50.4%
Cumulative gain past year
| Period | HAL Return | S&P 500 |
|---|---|---|
| 1m | -3.9% | -1.0% |
| 3m | -3.7% | +2.0% |
| 6m | -7.9% | +17.4% |
| 1y | +50.4% | +15.0% |
| ytd | +13.6% | +11.7% |
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HAL Fundamental Analysis
Halliburton's revenue trajectory has been essentially flat to slightly declining, with Q1 2026 revenue of $5.402 billion representing a -0.28% year-over-year decline from Q1 2025's $5.417 billion. The multi-quarter trend reveals a concerning pattern: revenue peaked at $5.833 billion in Q2 2024 and has since drifted lower through $5.697 billion (Q3 2024), $5.610 billion (Q4 2024), $5.417 billion (Q1 2025), $5.510 billion (Q2 2025), $5.600 billion (Q3 2025), $5.657 billion (Q4 2025), and $5.402 billion (Q1 2026). The segment breakdown shows Completion and Production generating $3.016 billion (55.8% of revenue) versus Drilling and Evaluation at $2.386 billion (44.2%), with the completions segment — Halliburton's core franchise — likely bearing the brunt of North American pressure. The stabilization at roughly $5.4-$5.7 billion per quarter suggests the revenue base has found a floor, but the absence of growth is a headwind for multiple expansion.
Profitability has been volatile but is recovering from a severe trough. Q1 2026 net income of $461 million on $5.402 billion in revenue produced a net margin of 8.53%, a sharp improvement from the Q3 2025 disaster quarter when net income collapsed to just $18 million (0.32% net margin) due to $442 million in other expenses and a 90.9% effective tax rate. Gross margin in Q1 2026 was 14.62%, down from 16.44% in Q4 2025 and 18.29% in Q4 2024, indicating meaningful margin compression over the past year. Operating margin stood at 12.57% in Q1 2026 versus 13.19% in Q4 2025 and 16.61% in Q4 2024, reflecting the dual pressures of pricing weakness in North American completions and a less favorable service mix. The Q1 2026 recovery in net income — up from $204 million in Q1 2025 — suggests cost actions and international mix are beginning to offset domestic headwinds.
Balance sheet health remains solid, with a current ratio of 2.04 and a debt-to-equity ratio of 0.777, indicating ample liquidity and moderate leverage. Free cash flow on a trailing twelve-month basis is $1.678 billion, though quarterly FCF has been uneven — just $81 million in Q1 2026 versus $828 million in Q4 2025 and $542 million in Q2 2025 — reflecting working capital swings and seasonal capex patterns. Return on equity of 12.26% and return on assets of 7.26% are respectable for the oilfield services industry, though well below the 20%+ ROE levels Halliburton generated in prior upcycles. The company returned $242 million to shareholders in Q1 2026 through $142 million in dividends and $100 million in buybacks, funded entirely from operating cash flow of $273 million, though the dividend payout ratio of 45.1% and the dividend-plus-capex coverage ratio of 0.82x from historical data suggest the current capital return pace may not be sustainable if FCF does not improve.
Quarterly Revenue
$5.4B
2026-03
Revenue YoY Growth
-0.3%
YoY Comparison
Gross Margin
14.6%
Latest Quarter
Free Cash Flow
$1.7B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is HAL Overvalued?
Because Halliburton is profitable with trailing net income of approximately $1.27 billion (TTM EPS of $0.054 is distorted by the Q3 2025 trough), the PE ratio is the appropriate primary valuation metric. The trailing PE of 18.72x compares to a forward PE of 12.35x, implying the market expects earnings to grow by roughly 52% over the next twelve months — a substantial gap that reflects analyst consensus EPS of $4.13 for the forward period versus the depressed trailing figure. This wide trailing-to-forward spread signals that the market is pricing in a significant earnings recovery, likely driven by international growth, cost normalization, and the absence of the one-time charges that crushed Q3 2025 results.
Relative to the broader Energy sector and oilfield services peers, Halliburton's valuation appears mixed. The price-to-sales ratio of 1.07x and EV-to-sales of 1.62x are modest, while the EV-to-EBITDA of 7.19x is reasonable for a company with cyclical earnings. The price-to-book ratio of 2.27x is below the stock's own historical average, and the price-to-cash-flow of 8.10x suggests the market is not paying a premium for cash generation. However, the PEG ratio of -0.40 is negative and not meaningful given the earnings distortion. Compared to SLB, which typically trades at a premium multiple, Halliburton's discount appears justified by its greater North American exposure and lower international revenue mix, though the gap may narrow if the international pivot gains traction.
Historically, Halliburton's PE ratio has ranged from a low of approximately 6.2x (Q4 2021) to a high of 290x (Q3 2025, distorted by the earnings trough), with a more normal range of 9x-18x during stable periods. The current trailing PE of 18.72x sits at the upper end of the normalized historical band, while the forward PE of 12.35x is closer to the middle. The PS ratio of 1.07x is near the low end of the historical range (which has spanned 3.19x to 7.95x over the past five years), suggesting that on a revenue basis the stock is inexpensive relative to its own history. This divergence — elevated trailing PE but depressed PS — encapsulates the current debate: the market is pricing in an earnings recovery but not yet rewarding the stock with a premium revenue multiple, implying that execution on the international growth strategy is the key catalyst for re-rating.
PE
18.7x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 6x~33x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
7.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. Revenue has been flat to declining, with Q1 2026 down 0.28% YoY, and gross margin has compressed to 14.62% from 18.29% a year earlier. The dividend payout ratio of 45.1% and dividend-plus-capex coverage of 0.82x indicate that capital returns may be unsustainable if free cash flow does not improve; Q1 2026 FCF was only $81 million. Additionally, earnings are highly volatile, as shown by the Q3 2025 net income collapse to $18 million due to $442 million in other expenses and a 90.9% effective tax rate, which makes forecasting difficult.
Market and competitive risks are also material. HAL trades at a trailing PE of 18.72x, near the upper end of its historical range of 9x-18x, leaving little room for multiple expansion if growth disappoints. The forward PE of 12.35x already prices a 52% earnings recovery, so any delay could trigger a de-rating. The stock's beta of 0.769 suggests lower volatility, but the 27.43% maximum drawdown over the past year shows it is not immune to sharp declines. Competitive pressure from SLB and other international service providers could limit pricing power, especially as Halliburton pivots to new markets like Argentina and Indonesia.
In a worst-case scenario, a sustained oil price decline below $60 per barrel would reduce North American drilling activity, further pressuring completions revenue and margins. If the international pivot fails to gain traction and one-time charges recur, earnings could miss the $4.13 consensus, leading to a sharp sell-off. The stock could retest its 52-week low of $21.46, representing a 40% downside from the current $35.84. The analyst low target of $29.00 implies a more moderate 19% decline, but a severe downturn could push shares below $25, especially if the dividend is cut.
FAQ
The most severe risk is continued margin compression and revenue stagnation; gross margin has fallen to 14.62% from 18.29% a year ago, and Q1 2026 revenue declined 0.28% YoY. Second, earnings volatility is high, as shown by the Q3 2025 net income collapse to $18 million due to $442 million in other expenses and a 90.9% tax rate. Third, the dividend payout ratio of 45.1% and coverage ratio of 0.82x raise concerns about capital return sustainability if free cash flow does not improve. Finally, macro risks include oil price declines below $60/bbl, which would reduce drilling activity and demand for HAL's services.
Our 12-month forecast has a base case (50% probability) of $40-$45, assuming oil prices average $75/bbl and international growth offsets North American weakness, with earnings meeting the $4.13 consensus. The bull case (30% probability) targets $48-$53 if oil prices stay above $80 and margins recover strongly. The bear case (20% probability) targets $25-$29 if oil prices fall below $60 and the international pivot fails. The most likely scenario is the base case, hinging on stable oil prices and successful execution of international contracts.
HAL appears undervalued on a forward basis but fairly valued on trailing metrics. The forward PE of 12.35x is below the trailing PE of 18.72x, reflecting expected EPS growth to $4.13, and the PS ratio of 1.07x is near the low end of its historical range (3.19x-7.95x). However, the trailing PE is at the upper end of its normalized 9x-18x range, suggesting the market is already pricing a recovery. Relative to peers like SLB, HAL trades at a discount due to its North American exposure, but this gap could narrow if the international pivot succeeds. Overall, the valuation implies the market expects significant earnings improvement, leaving little room for disappointment.
From a risk/reward perspective, HAL offers a favorable setup with 20.3% upside to the average analyst target of $43.12, and the forward PE of 12.35x is attractive if earnings recover as expected. However, the stock faces near-term headwinds from flat revenue and margin compression, and the bear case could see a retest of the 52-week low of $21.46, implying 40% downside. It is a good buy for investors with a medium-term horizon who believe in the international growth story and can withstand volatility. The low beta of 0.769 makes it less risky than typical energy stocks, but the 27.43% max drawdown shows it is not immune to sharp declines.
HAL is better suited for a medium-to-long-term investment horizon of at least 12-18 months, given the cyclical nature of oilfield services and the time needed for the international growth strategy to materialize. The low beta of 0.769 and 2.44% dividend yield make it less volatile than typical energy stocks, but the 27.43% max drawdown and earnings volatility argue against short-term trading. Long-term investors can benefit from the potential earnings recovery and multiple expansion, while short-term traders may face whipsaws around oil price fluctuations and quarterly earnings. A minimum holding period of one year is recommended to ride out commodity cycles.