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Halliburton (HAL) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Halliburton (HAL) closed at $18.84 in the latest trading session, marking a +1.67% move from the prior day. This move outpaced the S&P 500's daily gain of 0.06%. Meanwhile, the Dow gained 0.16%, and the Nasdaq, a tech-heavy index, lost 0.13%.

Coming into today, shares of the provider of drilling services to oil and gas operators had lost 14.45% in the past month. In that same time, the Oils-Energy sector lost 7.94%, while the S&P 500 lost 2.95%.

Investors will be hoping for strength from HAL as it approaches its next earnings release, which is expected to be October 21, 2019. The company is expected to report EPS of $0.37, down 26% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.92 billion, down 4.12% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.33 per share and revenue of $23.45 billion, which would represent changes of -30% and -2.27%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for HAL. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. HAL is currently a Zacks Rank #3 (Hold).

Digging into valuation, HAL currently has a Forward P/E ratio of 13.9. This represents a discount compared to its industry's average Forward P/E of 20.79.

Investors should also note that HAL has a PEG ratio of 2.19 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Field Services was holding an average PEG ratio of 2.19 at yesterday's closing price.

The Oil and Gas - Field Services industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 188, which puts it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow HAL in the coming trading sessions, be sure to utilize Zacks.com.

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