Halliburton Is Falling – What Are The Chances It Will Bounce Back?

by Trefis Team
Halliburton Company
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Halliburton (NYSE:HAL) fell nearly -14.4% in the last 5 trading days, not unlike some other companies tied to oil & gas industry. Will this trend continue over the next month, or should we expect a rebound? What about the next 3 months, 6 months, or a year? Turns out that there is a good chance of Halliburton rebounding 5%-10% in the coming months. Why do we say so? Because that’s how historically Halliburton’s stock has behaved. However, a longer term picture may not be so optimistic.

Our AI engine analyzes past patterns in stock movements to predict near term behavior for a given level of movement in the recent period, and suggests nearly a 50% probability of Halliburton rebounding by 5% over the next 21 trading days. Similarly, over the next 3 months, the chances of a 10% rebound are at a significant 46%. Our detailed dashboard highlights the chances of Halliburton’ stock rising after a fall and should help you understand near-term return probabilities for different levels of movements.

But what do the underlying fundamentals suggest? While there is a good chance of near term rebound, fundamentals don’t paint a very rosy picture which may concern long-term investors. .

Our dashboard Big Movers: Halliburton Moved -14.4% – What Next? lays this out.

At the beginning of this year, Halliburton’s trailing 12 month P/S ratio was 0.94. This figure decreased -29% to 0.67, before ending at 0.58 after the recent move. That’s a significantly more pessimistic picture. To add to that, the stock hasn’t done well in recent years either. Halliburton’s stock price decreased-47% between 2017 and 2019, and has decreased -72% between 2017 and now. Do the underlying financials have anything to do with it? Let’s take a look.

Halliburton’s revenue has increased 8.7% from $20,620 Mil in 2017 to $22,408 Mil in 2019. However, this wasn’t a consistent increase as the revenue actually decreased in 2019 compared to 2018. For the last 12 months, this figure stood at $18,974 Mil, implying additional decline of -15.3% over 2019 numbers. Margins paint a more grim picture. Halliburton hasn’t really been a profitable company. Its net margins decreased from -2.2% in 2017 to -5% in 2019. For the last 12 months, this figure understandably plummeted to -21.4%. No wonder the market hasn’t been rewarding.

Taking all perspectives together, we believe that while there is a good chance of short term returns, long-term investors may have better investment opportunities, such as this high quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.

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