Halliburton Stock Up 14% Over Last Ten Days, Can It Keep Up?

HAL: Halliburton logo

Halliburton stock (NYSE: HAL), an energy company organized into exploration, development, and production of oil and natural gas, has increased by 14% over the last ten trading days (two weeks) and currently stands at around $30. The company’s stock traded higher after OPEC+’s decision to cut production ahead of winter, which usually sees oil at seasonal highs. This should help keep a floor under oil and increase the willingness of private companies to raise their capital expenditure budgets. Oil & gas capital spending is rising and will need to increase further given ongoing demand and the potential for further Russian supply disruptions. Halliburton is generating substantial revenue growth in 2022 so far and should benefit from strong pricing in the U.S. and the need to expand production overseas.

In the second quarter, Halliburton’s revenue rose 37% year-over-year (y-o-y) to $5.1 billion. It earned $0.49 excluding impairment charges, up 40% y-o-y, showing modest margin expansion. In terms of revenue, HAL has an almost balanced revenue distribution with 48% coming from North America and 52% coming from overseas. Additionally, the company is involved throughout the entire E&P life cycle, with 45% of revenue coming from drilling and evaluation and 55% from production and completion. Q2’s key highlight was a substantial 24% y-o-y increase in completion and production revenue, largely due to strong performances in North America (up 26% y-o-y), which helped offset a seasonal slowdown in software sales. It is worth mentioning that Halliburton is also a leading software provider that is enhancing the company’s digital presence in a new age of oil production. This software also provides the company with a source of recurring revenues and the requirement of further tech support for its customers.

A strong recovery in the North American region has left the supply chain struggling to meet the demand for things like sand needed for hydraulic fracturing. As a result of these capacity constraints, HAL has been able to increase prices in order to maintain margins. Also, Halliburton is expected to benefit from the recent Inflation Reduction Act, which forces the Biden Administration to sell leases for drilling in the Gulf of Mexico. While this production will take several years to ramp up, it still has the potential for the company’s medium-term growth.

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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 55% chance of a rise in HAL stock over the next month (twenty-one trading days). See our analysis of HAL’s Stock Chance Of Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of rising’ using the last ten years’ data

[1] Returns of 1.5% or higher over a five-day period on 1088 occasions out of 2516 (43%); Stock rose in the next five days in 583 of these 1088 instances (54%)

[2] Returns of 14% or higher over a ten-day period on 123 occasions out of 2516 (5%); Stock rose in the next ten days in 83 of these 123 instances (67%)

[3] Returns of 6.4% or higher over a twenty-one-day period on 794 occasions out of 2516 (32%); Stock rose in the next twenty-one days in 439 of these 794 instances (55%)

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 Oct 2022
MTD [1]
YTD [1]
Total [2]
 HAL Return 22% 31% -45%
 S&P 500 Return 3% -23% 64%
 Trefis Multi-Strategy Portfolio 2% -25% 196%

[1] Month-to-date and year-to-date as of 10/18/2022
[2] Cumulative total returns since the end of 2016

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