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

Zacks Equity Research

Halliburton (HAL) closed at $21.68 in the latest trading session, marking a -0.46% move from the prior day. This change lagged the S&P 500's daily gain of 0.36%. Elsewhere, the Dow gained 0.01%, while the tech-heavy Nasdaq added 0.27%.

Coming into today, shares of the provider of drilling services to oil and gas operators had lost 0.14% in the past month. In that same time, the Oils-Energy sector gained 1.76%, while the S&P 500 gained 3.98%.

HAL will be looking to display strength as it nears its next earnings release, which is expected to be July 22, 2019. The company is expected to report EPS of $0.30, down 48.28% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.97 billion, down 2.84% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.33 per share and revenue of $24.16 billion. These totals would mark changes of -30% and +0.68%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for HAL. These revisions typically reflect the latest short-term business trends, which can change frequently. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 3.76% lower within the past month. 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 16.43. This valuation marks a discount compared to its industry's average Forward P/E of 16.87.

We can also see that HAL currently has a PEG ratio of 2.8. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Oil and Gas - Field Services industry currently had an average PEG ratio of 2.83 as of yesterday's close.

The Oil and Gas - Field Services industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 202, putting it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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