Halliburton Stock Gains After Q2 Earnings Top Estimates; Target Price $33 in Best Case

Halliburton, one of the world’s largest providers of products and services to the energy industry, reported better-than-expected earnings in the second quarter, sending its shares up over 3% on Tuesday.

The Houston, Texas-based energy company said its profit rose to $227 million, or $0.26 per share, up from $170 million, or $0.19 per share, seen in the previous quarter. That was higher than the market expectations of $0.22 per share.

The company reported total revenue of $3.7 billion, up from $3.5 billion registered in the previous quarter. Operating income was $434 million in the second quarter of 2021 compared to operating income of $370 million in the first quarter of 2021.

Following the upbeat results, Halliburton shares jumped 3.6% to $20.07 on Tuesday. The stock rose over 6% so far this year.

Analyst Comments

“Halliburton (HAL) laid out an above-consensus multi-year financial view, suggesting high confidence in the ongoing recovery. Growth contemplated is broad-based, high-margin, and FCF generative. For the near-term, though, guidance continues to be reasonably conservative and more in-line with our expectations,” noted Connor Lynagh, equity analyst at Morgan Stanley.

“Relative positioning less favorable vs. some global peers: Though it has decreased in absolute size, HAL still remains more NAm-focused vs. peers, where we see greater headwinds to value creation and returns improvement. Risk-reward relatively balanced: We see relatively balanced risk-reward for HAL’s shares and believe a more significant capex shift back into its core markets would be required for meaningful outperformance vs. the group.”

Halliburton Stock Price Forecast

Ten analysts who offered stock ratings for Halliburton in the last three months forecast the average price in 12 months of $25.94 with a high forecast of $33.00 and a low forecast of $16.50.

The average price target represents a 29.25% change from the last price of $20.07. From those ten analysts, five rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $28 with a high of $40 under a bull scenario and $15 under the worst-case scenario. The firm gave an “Equal-weight” rating on the energy company’s stock.

Several other analysts have also updated their stock outlook. Evercore ISI raised the target price to $38 from $29. Piper Sandler lifted the target price to $25.50 from $25.30. ATB Capital Markets upped the target price to $29 from $27.50. BofA Global Research increased the price objective to $33 from $28.

“Modest 2Q beat and 3Q guide which again appears to reflect conservative margins, but the real news was that HAL introduced a 2023 outlook implying ~$4B of EBITDA vs $3.5Bcons and our $4B. Investors wonder if HAL is being too aggressive guiding to ’23 given the industry’s typical lack of visibility. It will be interesting to see if OFS peers endorse this view in the coming days,” noted Marc Bianchi, equity analyst at Cowen.

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