Halliburton Stock Doubled in 2022. It Has More Upside, Says Analyst.

The company “is in a strong position to benefit from increased [oil exploration and production] spending on international and offshore projects in the intermediate term and continue to generate industry leading returns in the U.S. frac market,” wrote Hallead in his research report.

He sees the company generating $6 billion in earnings before interest, taxes, depreciation, and amortization, or Ebitda, in 2024 and values the company at 6.6 times that amount. “at the lower end of its…historical range of 6 to 9 times.”

What’s more, Hallead sees Saudi Arabi resuming its role as price setter in global oil markets, which should keep benchmark prices above $70 a barrel. Oil is around $80 a barrel today.

Halliburton stock is down 1% in early trading Thursday following the bullish call. The
S&P 500
and
Dow Jones Industrial Average
are down 0.5% and 0.4%, respectively.

Halliburton stock is up about 2% year to date, after rising 108% in 2022.

Halliburton stock is very popular on Wall Street. With the new Buy rating, about 93% of analysts covering the company rates shares at Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%.

The average analyst price target is about $48, close to Hallead’s $50 mark.

Along with Halliburton, Hallead has Buy ratings on shares of oil-services firms
Cactus
(WHD),
Schlumberger
(SLB),
Oceaneering International
(OII),
TechnipFMC
(
FTI
),
Transocean
(RIG),
Baker Hughes
(BKR),
Noble
(NE),
Valaris
(VAL), and
NOV
(
NOV
).

He has Buy ratings on 10 stocks, and Hold ratings on four stocks:
ProPetro
(PUMP),
Helmerich & Payne
(HP),
Patterson-UTI Energy
(PTEN), and
Nabors Industries
(NBR).

He’s bullish about the sector. “The current energy-cycle dynamics reminds us of the 1995-2010 period when oil-service stocks outperformed the S&P 500 in 11 of 16 years,” he added in a launch report.

Write to Al Root at allen.root@dowjones.com