Is It Too Late To Consider Halliburton (HAL) After Its 92.6% One-Year Surge?

• Wondering if Halliburton stock at around US$39.83 still offers value, or if most of the easy gains are already behind it? This article breaks down what the current price might be implying.
• The share price has had a mixed short term patch, with the stock down 5.1% over the past week, up 6.0% over the last 30 days and showing returns of 34.6% year to date and 92.6% over the past year.
• Recent attention on Halliburton has centered on its position within the broader energy services sector and how investors are weighing sector specific risks against ongoing project activity. This backdrop helps explain why the stock has seen both pullbacks and strength over different time frames.
• Simply Wall St currently gives Halliburton a valuation score of 4/6. This will be unpacked using multiple valuation approaches, and later in the article you will see an even more complete way to frame what that score really means for long term investors.

Halliburton delivered 92.6% returns over the last year. See how this stacks up to the rest of the Energy Services industry.

Approach 1: Halliburton Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts them back to today using a required rate of return, giving an estimate of what the business might be worth right now.

For Halliburton, the model uses a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $1.52b. Analyst based projections in this model show free cash flow of $1.88b in 2026 and $2.76b by 2030, with further years extrapolated by Simply Wall St rather than based on direct analyst forecasts.

Adding up and discounting these projected cash flows produces an estimated intrinsic value of about $63.65 per share. Compared with the recent share price of around $39.83, the DCF output implies the stock is about 37.4% undervalued under this set of assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Halliburton is undervalued by 37.4%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Halliburton.

Approach 2: Halliburton Price vs Earnings

For a profitable company like Halliburton, the P/E ratio is a straightforward way to think about what you are paying for each dollar of current earnings. It is widely used because it ties the share price directly to the earnings that ultimately support shareholder returns.

What counts as a normal or fair P/E depends on how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually points to a lower P/E.

Halliburton currently trades on a P/E of about 21.6x. That is close to the peer average of 21.5x and below the Energy Services industry average of 34.9x. Simply Wall St’s Fair Ratio metric suggests a P/E of 24.9x for Halliburton, based on factors such as earnings growth, profit margins, industry, market cap and company specific risks.

This Fair Ratio is more tailored than a simple comparison with peers or the broad industry. It adjusts for Halliburton’s own characteristics rather than assuming all companies deserve the same multiple. Comparing the current 21.6x P/E with the 24.9x Fair Ratio indicates that the stock is trading below this Fair Ratio based view.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Halliburton Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as a simple way for you to attach a clear story about Halliburton to the numbers you think are reasonable for its future revenue, earnings, margins and fair value.

A Narrative on Simply Wall St connects three things: your view of Halliburton’s business story, a financial forecast built from that view, and a resulting fair value that you can compare against today’s share price to help decide whether the stock looks attractive, fully priced or expensive relative to your own assumptions.

These Narratives are available on the Halliburton Community page, are designed to be easy to use, and automatically refresh when new data such as earnings, news or analyst estimates are added so your fair value view does not go stale.

For example, one investor might lean toward a higher Halliburton fair value of about US$46.03 based on stronger growth and margins. Another might anchor on a lower fair value near US$28.17 with flatter revenue and a lower future P/E. Narratives let you see, compare and customise these kinds of perspectives in one place.

For Halliburton, here are previews of two leading Halliburton Narratives:

🐂 Halliburton Bull Case

Fair value in this Narrative: US$41.64

Gap to this fair value compared with the recent US$39.83 close: about 4.4% below the Narrative fair value.

Revenue growth assumption: 3.5% a year.

• Analysts behind this view see steady revenue growth with profit margins moving from 6.9% to 10.6% over the next few years, supported by technology upgrades and international contracts.
• The Narrative focuses on growing demand for natural gas, the need to offset production declines in mature fields, and wider use of Halliburton’s digital and automation tools to support more stable, higher margin cash flows.
• Key risks include faster decarbonization, regulatory pressure, legal and environmental costs, and the possibility that Halliburton does not move quickly enough into lower carbon and digital areas.

🐻 Halliburton Bear Case

Fair value in this Narrative: US$28.17

Gap to this fair value compared with the recent US$39.83 close: about 41.4% above the Narrative fair value.

Revenue growth assumption: revenue is assumed to decline about 0.3% a year, with the focus on margin improvement rather than top line expansion.

• This more cautious view focuses on accelerating decarbonization, ESG driven capital shifts, and regulation as potential headwinds for Halliburton’s long run revenue and project pipeline.
• It also highlights exposure to cyclical North American activity, possible overcapacity, and competition from local and national providers as sources of pricing pressure and cash flow volatility.
• The Narrative also notes that stronger international demand, digital tools and cost control could challenge this bearish stance if they support better contract wins, margins, and returns than these assumptions allow for.

If you want to see how your own expectations for Halliburton compare with these two starting points, you can build and track a custom Narrative in minutes on the Community page, then adjust the revenue, margin and P/E assumptions until the fair value lines up with your view of the stock.

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Halliburton on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Do you think there's more to the story for Halliburton? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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