Is Halliburton a Good Oil & Gas Stock to Own?

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

HAL – Oil and gas company Halliburton’s (HAL) shares have rallied with rising oil prices over the past few months. The company has also secured several contract awards during this period. But the question is, is it wise to bet on the stock now even though the company’s third-quarter revenue fell short of analysts’ expectations? Let’s discuss.

Halliburton Company (HAL) in Houston, Tex., is one of the world’s largest providers of products and services to the energy industry. Soaring oil prices, higher cementing activity in the Middle East/Asia region, increased well intervention services in the Europe/Africa/CIS region, and improved drilling-related services have helped the company prosper. 

The stock has gained 13.5% in price over the past month to close yesterday’s trading session at $25.12. However, it is currently trading 6.1% below its 52-week high of $26.75, which it hit on October 25, 2021. According to Refinitiv IBES, even though HAL’s third-quarter profit was in line with analysts’ estimates, its $3.86 billion in revenue was slightly below  consensus expectations of $3.91 billion. 

Also, the U.S. Well Services, Inc. (USWS) filed a patent infringement lawsuit against HAL in April 2021, alleging that it infringed its electric fracking patents. Furthermore, Murry Gerber, a HAL board member, sold 44,590 shares last month. So, the stock’s near-term prospects look uncertain.

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

Increased Contracts

In mid-September HAL announced that it had been awarded an integrated services contract to execute a three- to five-well drilling and completions campaign for Energean. Also, Sapura Drilling awarded the company an offshore integrated contract on August 10. The company also won a seven-year contract in July 2021 to provide Production Chemicals and Associated Services for a large IOC in Oman.

Impressive Financials

HAL’s Completion and Production segment revenue came in at $2.14 billion for its third fiscal quarter, ended September 30, 2021, up 35.7% year-over-year, while its Drilling and Evaluation segment revenue increased 23.1% year-over-year to $1.72 billion. The company’s adjusted net income came in at $248 million, representing a 148% year-over-year rise. Its adjusted EPS increased 154.5% year-over-year to $0.28. Also, its FCF came in at $469 million.

Stretched Valuation

In terms of forward non-GAAP P/E, HAL’s 24.66x is 99.4% higher than the12.37x industry average. Likewise, the stock’s 11.61x forward EV/EBITDA is 41% higher than the 8.24x industry average. Its 17.48x and 3.96x respective forward EV/EBIT and P/B are higher than the 13.48x and 1.82x industry averages.

POWR Ratings Reflect Uncertainty

HAL has an overall C rating, which equates to a Neutral in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. 

Our proprietary rating system also evaluates each stock based on eight distinct categories. HAL has a B grade for Growth, which is consistent with analysts’ expectations that its revenue and EPS will grow 4.5% and 63.1%, respectively, year-over-year in its fiscal year 2021 to $15.10 billion and $1.06.

However, the stock has a C grade for Value, which is in sync with its higher-than-industry valuation ratios. Also, HAL has a D grade for Stability, consistent with its 2.74 beta.

HAL is ranked #9 of 42 stocks in the Energy – Services industry. In addition to the POWR Rating grades I’ve just highlighted, we’ve also rated the stock for Momentum, Sentiment, and Quality. Get all the HAL ratings here.

Bottom Line

Rising demand for oil and related services, such as drilling, has helped HAL grow its business. In May 2021, the company collaborated with TGS-NOPEC Geophysical ASA to introduce advanced seismic imaging. However, the stock looks significantly overvalued now, and seems to have reached its peak. So, we think it could be wise to wait before scooping up its shares.

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

While HAL has an overall POWR Rating of C, one could check out these other B-rated (Buy) stocks within the same industry: Oceaneering International, Inc. (OII), North American Construction Group Ltd. (NOA), and Archrock, Inc. (AROC).


HAL shares fell $0.12 (-0.48%) in premarket trading Thursday. Year-to-date, HAL has gained 33.74%, versus a 22.60% rise in the benchmark S&P 500 index during the same period.


About the Author: Manisha Chatterjee


Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
HALGet RatingGet RatingGet Rating
OIIGet RatingGet RatingGet Rating
NOAGet RatingGet RatingGet Rating
AROCGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


These 5 Economic Reports Hold the Key for Stocks

Thanks to signs of easing inflation in May we have enjoyed a rally for stocks with the S&P 500 (SPY) making new all time highs. What happens next for stocks very much is tied to the results for these 5 upcoming economic reports. Steve Reitmeister previews these announcements with keys to what stocks do next. Read it all in the full article below...

4 Software Stocks Primed for Major Upside in 2024

The software industry is thriving, buoyed by digital transformation, soaring demand for cloud solutions, and the integration of advanced technologies like AI and ML, presenting lucrative opportunities for savvy investors. So, let’s look at tech stocks SS&C Technologies (SSNC), Informatica (INFA), Verint Systems (VRNT), and Yext (YEXT) poised for significant upside in 2024. Read on…

3 Pharma Stocks Primed for May Investment Opportunities

The pharma industry is poised for tremendous growth driven by surging healthcare needs, the introduction of groundbreaking medications, and relentless technological innovation. Hence, quality pharma stocks Collegium Pharmaceutical (COLL), Green Thumb Industries (GTBIF), and Bristol-Myers Squibb (BMY) emerge as prime investment options this month. Read more…

3 Bargain Internet Stock Buys for Savvy Investors

The increased internet penetration is reshaping various industries, driving digital transformation, connectivity, and access to services like e-commerce, remote work, and online entertainment. Thus, robust internet stocks Jamf Holding (JAMF), Upwork (UPWK), and TrueCar (TRUE), which are trading at discounts to their peers, could be ideal buys. Keep reading…

Will Stocks Continue to Rise...Or Time for Rug Pull?

It’s hard not to celebrate each new high for the S&P 500 (SPY). Yet with high inflation not dead and buried then perhaps this stock market celebration is a tad early. That is why you need to hear what 44 year investment veteran Steve Reitmeister is saying about what comes next for the stock market and how to stay on the right side of the action. Read on below 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