A stock that has been left for dead is now flashing signs of opportunity.
With shares trading near multi-year lows, long-term investors have a chance to pick up a world-class energy services leader at a discount.
It’s Not the End of the Oil Patch Story
Halliburton (NYSE: HAL) has been left for dead by the market. Shares are down more than 23% this year and nearly 45% over the last twelve months, even as the S&P 500 pushes to new highs.
North American weakness, margin compression, and pressure in its core businesses have fueled the decline.
And yet, beneath the gloom lies a company still winning contracts, generating free cash flow, and paying dividends.
The disconnect between perception and fundamentals may be setting up a compelling long-term entry point for contrarian investors.
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*Examples that we provide of share price increases pertaining to a particular Issuer from one referenced date to another represent an arbitrarily chosen time period and are no indication whatsoever of future stock prices for that Issuer and are of no predictive value. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT stock recommendations or constitute an offer or sale of the referenced securities.
Strategic Positioning
Halliburton remains one of the world’s largest energy services companies, with operations spanning more than 70 countries.
Its two main divisions, Completion and Production, and Drilling and Evaluation, touch nearly every part of the oil and gas value chain.
Unlike rivals Schlumberger and Baker Hughes, Halliburton leans heavily on North America, where it generates more than 40% of revenue.
That exposure has been a headwind, but it also makes HAL highly leveraged to any rebound in U.S. drilling activity. When activity cycles up again, Halliburton tends to benefit disproportionately.
This positioning also means HAL is a vital contractor to supermajors and independents alike. Its scale, technology investments, and global reach give it staying power, even in volatile markets.
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Action Plan: First Moves
For investors, Halliburton’s geographic skew is a double-edged sword. The near-term drag of U.S. weakness has crushed sentiment, but it sets up powerful torque if drilling activity rebounds.
Short-term traders could look for accumulation under $22, with a stop near $19.50.
Dividend investors can secure a 3.2% yield backed by strong free cash flow and conservative payout ratios.
Long-term buyers may treat the stock as a cyclical lever on U.S. energy, adding small positions now and scaling in if weakness persists.
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Recent Momentum
While earnings have been soft, Halliburton is still scoring big wins. The latest came with a five-year contract from ConocoPhillips to provide offshore well stimulation services in the North Sea.
The deal includes extensions and will deploy the company’s Octiv digital fracturing tools to boost efficiency and safety.
Halliburton also secured a high-profile carbon capture and storage contract in the U.K.’s East Coast Cluster, part of a broader push toward low-carbon energy solutions.
These wins highlight a crucial point: even as traditional drilling slows, Halliburton is adapting its portfolio to secure relevance in a changing energy landscape.
In Q2, the Completion and Production segment delivered $3.2 billion in revenue, up 2% year over year, driven by pressure pumping and well intervention services.
Internationally, drilling activity remains resilient, even as North America softens.
For investors, this combination of weak sentiment but steady contract wins often signals an inflection point.
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Growth Outlook
Analysts project Halliburton’s EPS to decline 18% in 2025, but the longer-term trajectory looks healthier.
As global oil demand normalizes and capital spending rebounds, Halliburton’s technology-driven services are poised to ride the cycle higher.
Beyond traditional drilling, Halliburton is investing in AI-enabled oilfield solutions, advanced completion tools, and carbon management projects.
These initiatives could create new multi-billion-dollar revenue streams over the next decade.
Free cash flow remains strong. In 2024, Halliburton generated $2.6 billion, with capital expenditures capped at just 6% of revenue.
That discipline supports dividends and buybacks even in down years, giving HAL a steady return-of-capital profile.
Action Plan: Income & Rebound
At just over $21 per share, HAL trades at around 10x forward earnings, well below its long-term average.
The stock yields about 3.2%, with a payout ratio of only 32%. That makes the dividend safe and leaves room for growth as earnings stabilize.
If consensus targets are right, HAL could climb back toward $30 within 12–18 months. More bullish calls suggest $40+, representing 100% upside from current levels.
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*Examples that we provide of share price increases pertaining to a particular Issuer from one referenced date to another represent an arbitrarily chosen time period and are no indication whatsoever of future stock prices for that Issuer and are of no predictive value. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT stock recommendations or constitute an offer or sale of the referenced securities.
Risks: The Roadblocks Ahead
Halliburton is not a free ride. Several key risks need to be weighed:
1. Geographic exposure
Over 40% of HAL’s revenue comes from North America, where pricing power is under pressure and rig counts remain weak.
Unlike rivals with stronger international mixes, HAL is more exposed to regional downturns.
2. Margin compression
Completion & Production operating margins have already slipped.
Continued pricing weakness in pressure pumping and stimulation services could cut deeper into profits.
3. Competitive intensity
Schlumberger and Baker Hughes continue to grab market share internationally.
Technology investments by peers could erode Halliburton’s edge in drilling and evaluation services.
4. Macro and commodity cycles
Oil demand shocks, OPEC+ policy shifts, or a recession could stall global drilling.
Volatility in crude prices tends to translate quickly into service contract volatility.
5. Geopolitical volatility
Operations in the Middle East, Mexico, and parts of Africa expose HAL to shifting political risks.
Carbon capture projects, while promising, depend on policy support that could change with elections.
6. Investor sentiment
HAL trades at a steep discount for a reason. Large institutions have been hesitant to re-enter, and until that changes, momentum may remain weak.
Action Plan: Valuation Gap
Halliburton’s current valuation looks disconnected from its fundamentals. At 10x forward earnings and below its 10-year average P/E, the stock trades as if decline is permanent.
Yet management continues to generate billions in free cash flow, reduce debt, and invest in new technologies.
If earnings simply stabilize, the stock could re-rate to 12–13x forward EPS, implying mid-to-high $20s. That would already mean a 25–30% gain.
If oil markets tighten or U.S. drilling activity rebounds, the upside case toward $40+ becomes realistic.
Final Take
Halliburton has fallen hard, but markets often overshoot on the downside.
Contracts with energy majors, strong free cash flow, and a commitment to shareholder returns suggest the company is far healthier than its stock price reflects.
For contrarian investors willing to buy when sentiment is bleak, HAL offers income, deep value, and optionality on a global energy recovery.
At today’s levels, it looks less like a falling knife and more like a coiled spring.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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