Citi has revised its target price for Halliburton (HAL, Financial), reducing it from $33 to $31, while maintaining a Buy rating on the stock. The firm's analysis suggests that Halliburton is currently priced at levels typical of a recession, yet this economic downturn may not be as severe as previous ones.
Despite this optimism, Halliburton's recent guidance indicates potential challenges. The company has expressed concerns about operational interruptions in North America and possible reductions in customer spending internationally. Citi emphasizes that it seeks greater clarity on Halliburton's earnings potential before considering the company as a top investment option in its portfolio.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 25 analysts, the average target price for Halliburton Co (HAL, Financial) is $30.93 with a high estimate of $50.00 and a low estimate of $23.00. The average target implies an upside of 50.06% from the current price of $20.61. More detailed estimate data can be found on the Halliburton Co (HAL) Forecast page.
Based on the consensus recommendation from 28 brokerage firms, Halliburton Co's (HAL, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Halliburton Co (HAL, Financial) in one year is $38.34, suggesting a upside of 86.03% from the current price of $20.61. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Halliburton Co (HAL) Summary page.
HAL Key Business Developments
Release Date: April 22, 2025
- Total Revenue: $5.4 billion for Q1 2025, a decrease of 7% compared to Q1 2024.
- Adjusted Operating Margin: 14.5% for Q1 2025.
- International Revenue: $3.2 billion, a decrease of 2% year over year.
- North America Revenue: $2.2 billion, a 12% decrease year over year.
- Cash Flow from Operations: $377 million for Q1 2025.
- Free Cash Flow: $124 million for Q1 2025.
- Net Income per Diluted Share: Reported at $0.24; Adjusted at $0.60.
- Completion and Production Division Revenue: $3.1 billion, a decrease of 8% compared to Q1 2024.
- Drilling and Evaluation Division Revenue: $2.3 billion, a decrease of 6% compared to Q1 2024.
- Capital Expenditures: $302 million for Q1 2025.
- Share Repurchase: Approximately $250 million of common stock repurchased in Q1 2025.
- Pre-tax Charge: $356 million due to severance costs, asset impairments, and other items.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Halliburton Co (HAL, Financial) delivered total company revenue of $5.4 billion and an adjusted operating margin of 14.5% for the first quarter of 2025.
- The company generated $377 million of cash flow from operations and $124 million of free cash flow, while repurchasing approximately $250 million of its common stock.
- Halliburton Co (HAL) won significant contracts, including work with Shell in Brazil and exploration projects in Suriname and West Africa, showcasing its strong value proposition and service quality.
- The ZEUS IQ closed-loop autonomous fracturing operation was successfully completed, highlighting Halliburton Co (HAL)'s technological advancements in the North American market.
- The company expects to return at least $1.6 billion of cash to shareholders through buybacks and dividends in 2025, demonstrating a commitment to shareholder returns.
Negative Points
- International revenue decreased by 2% year over year, primarily due to lower activity in Mexico, which remains a challenging market with no immediate recovery in sight.
- North America revenue was down 12% compared to the first quarter of 2024, driven by lower stimulation activity and decreased completion tool sales.
- The company recognized a pretax charge of $356 million due to severance costs, asset impairments, and other items, impacting financial results.
- There is increased uncertainty in the market due to recent economic concerns and the faster-than-expected return of OPEC production, which could affect future performance.
- Tariff impacts are expected to affect margins, with an estimated $0.02 to $0.03 per share impact in the second quarter, and further clarity on the full-year impact is pending.
