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

Zacks Equity Research

Halliburton (HAL) closed the most recent trading day at $23.75, moving -0.42% from the previous trading session. This change lagged the S&P 500's 0.46% gain on the day. At the same time, the Dow added 0.9%, and the tech-heavy Nasdaq gained 0.59%.

Coming into today, shares of the provider of drilling services to oil and gas operators had gained 10.11% in the past month. In that same time, the Oils-Energy sector gained 3.51%, while the S&P 500 gained 4.04%.

Investors will be hoping for strength from HAL as it approaches its next earnings release, which is expected to be July 22, 2019. On that day, HAL is projected to report earnings of $0.30 per share, which would represent a year-over-year decline of 48.28%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.97 billion, down 2.94% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.33 per share and revenue of $24.23 billion, which would represent changes of -30% and +0.98%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for HAL. These revisions help to show the ever-changing nature of near-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. Within the past 30 days, our consensus EPS projection has moved 3.47% lower. HAL is holding a Zacks Rank of #5 (Strong Sell) right now.

In terms of valuation, HAL is currently trading at a Forward P/E ratio of 17.94. Its industry sports an average Forward P/E of 18.09, so we one might conclude that HAL is trading at a discount comparatively.

It is also worth noting that HAL currently has a PEG ratio of 3.06. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Field Services was holding an average PEG ratio of 3.02 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 178, which puts it in the bottom 31% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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