Is Halliburton a Smart Oil & Gas Equipment & Services Stock to Invest In?

NYSE: HAL | Halliburton Company  News, Ratings, and Charts

HAL – Oil and gas equipment company Halliburton (HAL) has been gaining significantly in price this year, driven by the rising oil and gas prices. However, given its poor top and bottom-line growth over the past few years, is HAL a buy now? Read on to find out.

Halliburton Company (HAL) is one of the world’s largest providers of products and services to the energy industry, functioning across more than 70 countries. The company operates in two segments- Completion and Production; and Drilling and Evaluation.

On May 23, 2022, HAL announced its agreement with Aker BP, a Norwegian oil and gas exploration and production company, to co-develop next-generation field development planning software. The new cloud application, Field Development Planning (FDP), aims to bolster advanced risk management concerning field development-related activities.

Moreover, on April 19, 2022, Jeff Miller, Chairman, President, and CEO, said, “I’m excited about the accelerating pace of global activity, pricing improvement, and Halliburton’s strong outlook. With our unique value proposition, clearly defined strategic priorities, leading technology portfolio, and global market presence, I expect Halliburton will deliver profitable growth, strong free cash flow, and industry-leading returns.”

Over the past year, HAL has gained 55.4% and 60.3% year-to-date to close yesterday’s trading session at $36.67. In addition, the stock has gained 82.7% over the past nine months and marginally over the past month.

Here is what could shape HAL’s performance in the near term:

Mixed Financials

For the first quarter ended March 31, 2022, HAL’s total revenue came in at $4.28 billion, up 24.1% year-over-year. Its net income came in at $263 million, up 54.7% year-over-year, while its EPS came in at $0.29, up 52.6% year-over-year. However, the company’s cash and equivalents came in at $2.15 billion, down 11.9% year-over-year.

Favorable Analyst Expectations

Analysts expect HAL’s revenue to increase 25% in the current year and 15.5% next year. Also, its EPS is estimated to increase 75% in the current year and 40.7% next year. Furthermore, HAL’s EPS is expected to grow 60.8% per annum for the next five years. It surpassed EPS estimates in each of the trailing four quarters.

Out of the fourteen Wall Street analysts who rated HAL, twelve rated it Buy, and two rated it Hold. Moreover, Wall Street analysts expect the stock to hit $46.83 shortly, indicating a potential upside of 27.7%.

Stretched Valuations

In terms of its forward EV/S, HAL is currently trading at 2.16x, 8.1% higher than the industry average of 2.00x. The stock’s forward P/S multiple of 1.73x is 9.8% higher than the industry average of 1.57x. In terms of forward EV/EBITDA, HAL’s 11.21x is significantly higher than the industry average of 6.62x.

Mixed Profit Margins

HAL’s trailing-twelve-month net income margin of 9.61% is 97.7% higher than the industry average of 4.86%, while its trailing-twelve-month EBIT margin of 11.81% is 8.7% higher than the industry average of 10.86%. However, its trailing-12-month gross profit margin of 13.54% is 66.3% lower than the industry average of 40.13%, and its trailing-twelve-month EBITDA margin of 17.45% is 20.8% lower than the industry average of 22.03%.

POWR Ratings Reflect Uncertainty

HAL has an overall rating of C, equating to Neutral in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

HAL has a Quality grade of C, consistent with its mixed profit margins.

The stock has a C grade for Stability, in sync with its 24-month beta of 0.98.

In the 47-stock Energy – Services industry, HAL is ranked #23. The industry is rated C.

Click here to see the additional POWR Ratings for HAL (Growth, Value, Momentum, Sentiment).

View all the top stocks in the Energy – Services industry here.

Bottom Line

Energy services company HAL is expected to benefit from the high oil and gas prices. However, HAL’s stretched valuations and declining cash balance is concerning. Moreover, its revenue and EPS have declined at CAGRs of 12.4% and 5% over the past three years, respectively. Hence, I think it might be wise to wait for a better entry point in the stock.

How Does Halliburton Company (HAL) Stack Up Against its Peers?

While HAL has an overall POWR Rating of C, one might consider looking at its industry peers, ChampionX Corporation (CHX), NOW Inc. (DNOW), and Solaris Oilfield Infrastructure, Inc. (SOI), which have an overall B (Buy) rating.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


HAL shares were trading at $36.26 per share on Wednesday afternoon, down $0.41 (-1.12%). Year-to-date, HAL has gained 59.58%, versus a -19.49% rise in the benchmark S&P 500 index during the same period.


About the Author: Riddhima Chakraborty


Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
HALGet RatingGet RatingGet Rating
CHXGet RatingGet RatingGet Rating
DNOWGet RatingGet RatingGet Rating
SOIGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Investors in “Wait and See” Mode

Have you noticed that the S&P 500 (SPY) has been trading in a tight trading range of only 6,000 to 6,100 the past few weeks? Steve Reitmeister shares why this is happening along with a game plan for being on the right side of the market action. Read on for the full story...

3 Renewable Fuel Stocks With Big Potential

The renewable fuel sector is leading the global energy transition, driven by significant government initiatives that have accelerated the adoption of clean energy and fueled remarkable growth in recent years. So, investing in fundamentally stable renewable fuel stocks Vistra Corp. (VST), Duke Energy (DUK), and American Electric Power (AEP) could be a wise move for investors. Read on...

American Airlines (AAL) vs. Alaska Air Group (ALK): Which Airline Stock Is Set to Soar Higher?

The adoption of advanced technology and surging air travel demand are brightening the prospects for the airline industry. To analyze which airline stock is set to soar higher, let’s compare American Airlines Group (AAL) and Alaska Air Group (ALK). Read on to find out…

3 Warren Buffett Stocks That Are Smart Buys Now

Warren Buffett’s investment strategy has stood the test of time, delivering remarkable returns for decades. Currently, his portfolio includes Visa (V), VeriSign (VRSN), and DaVita (DVA) shares, which reflects his confidence in the long-term growth potential of these companies. So, could they be smart buys right now? Read on to find out…

Stock Market Alert: History Repeating Itself?

The last time we played around with tariffs was back in 2018 when we started a trade war with China. To say the least that was very negative for stocks as the S&P 500 (SPY) tanked the second half of the year. We need to learn from those history lessons to chart our course for investing in 2025. Read on for more...

Read More Stories

More Halliburton Company (HAL) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All HAL News