Can Halliburton’s Stock Rebound After A 30% Fall Over Last Month?
Halliburton stock (NYSE: HAL), an energy company organized into exploration, development, and production of oil and natural gas, has declined by 30% over the last twenty-one trading days (one month) and currently stands at around $29. The company’s stock traded lower as signs of slowing consumption sent oil prices sliding across the energy sector. U.S. Crude oil prices fell below $100 per barrel for the first time since May 11 due to recession fears coupled with concerns about weakening demand. This outweighed a fundamentally tight supply market caused by several factors. Firstly, a surprising economic rebound drove demand for oil after several months of lockdowns. Secondly, the supply was not able to respond to increased demand as OPEC was probably cautious not to oversupply the market again, and the fact that oil production has long investment cycles. Lastly, the oil prices also increased sharply due to the conflict in Ukraine and sanctions on Russia.
Halliburton’s oil rig count is rising again after seven years of relative underinvestment (as a result of a slump in oil prices in 2014). Although this count is not at 2019 levels yet, it still indicates an improvement for the oil service company. To add to this, the company is gaining momentum in 2022 – with revenues growing 24% year-over-year (y-o-y) to $4.3 billion in Q1 and earnings rising to $0.29 per share from $0.19 per share in the year-ago quarter. It should be noted that the company’s management expects North American customer spending to grow 35% this year from its previous estimate of 25%. The company also expects international activity to gain momentum in the second quarter and further accelerate in the second half of the year. Given that the company’s hydraulic fracturing fleet (equipment used to extract oil through the earth through hydraulic fracturing) remains sold out in North America for the full year 2022, HAL should likely be able to command strong pricing in its core market in fiscal 2023 as well, provided demand continues to exceed supply. A multi-year recovery could be in store for Halliburton’s sales since they are still below where they were in the last ten years.
Now, is HAL stock poised to decline in the short term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last ten years, there is a 88% chance of a rise in HAL stock over the next month (twenty-one trading days). See our analysis on HAL’s Stock Chance Of Rise for more details.
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Calculation of ‘Event Probability’ and ‘Chance of rising’ using last ten years’ data
[1] Returns of -10% or lower over a five-day period on 88 occasions out of 2514 (4%); Stock rose in the next five days in 42 of these 88 instances (48%)
[2] Returns of -8.8% or lower over a ten-day period on 229 occasions out of 2514 (9%); Stock rose in the next ten days in 109 of these 229 instances (48%)
[3] Returns of -30% or lower over a twenty-one-day period on 25 occasions out of 2514 (<1%); Stock rose in the next twenty-one days in 22 of these 25 instances (88%)
It is helpful to see how its peers stack up. HAL Peers shows how Halliburton stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.
| Returns | Jul 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| HAL Return | -8% | 26% | -47% |
| S&P 500 Return | 1% | -20% | 71% |
| Trefis Multi-Strategy Portfolio | 5% | -23% | 208% |
[1] Month-to-date and year-to-date as of 7/6/2022
[2] Cumulative total returns since the end of 2016
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