Halliburton Stock Up 14% Over Last Ten Days. What’s Next?

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 $39. The International Energy Agency (IEA) increased its global oil demand growth estimate for 2022 and the next year, 2023, on rising crude consumption in India, China, and the Middle East. IEA now expects oil demand to grow by 1.7 million barrels per day in 2023, up from its previous estimate of 1.6 million. This comes after China is scrapping its Covid-19 quarantine rule for inbound travelers, which is seen as a major step in reopening its borders. 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 third quarter, Halliburton’s revenue rose 39% year-over-year (y-o-y) to $5.4 billion. The company’s net income surged to $544 million, or $0.60 per share from $109 million, or $0.26 per share, in the year-earlier period. In terms of revenue, HAL has an almost balanced revenue distribution with 49% coming from North America and 51% coming from overseas. To break down the revenues by geography, North American business grew more than 63% y-o-y to 2.6 billion, Middle East/Asia rose by 31% y-o-y to 1.2 billion, and Latin America grew by 35% y-o-y to $841 million. The Europe/Africa/CIS business was down 5% to $639 million in Q3. Additionally, the company is involved throughout the entire E&P life cycle, with 41% of revenue coming from drilling and evaluation, and 59% from production and completion.

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 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 to aid the company’s medium-term growth.

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 53% 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