Halliburton (NYSE:HAL) is an S&P 500 (SPX) stock with the potential to be a long-term winner, as per Wall Street analysts. Halliburton is part of the energy sector but is not involved in oil and gas exploration. Instead, it is an oilfield service company providing equipment, maintenance, engineering, and construction services to the energy, industrial, and government sectors. Analysts expect solid growth prospects for Halliburton, backed by the company’s strong fundamentals and the demand for oilfield services.
Here’s Why HAL Stock Could Be a Good Bet
HAL stock has gained over 24% in the past year. Still, it trades at a lower price/earnings (P/E) multiple of 13.1x compared to its rival Schlumberger’s (NYSE:SLB) valuation multiple of 18.5x. Plus, it has consistently generated profits and is favored by Wall Street analysts.
On March 18, Jefferies analyst Lloyd Byrne reiterated a Buy rating on HAL stock and a $49 (26.2% upside) price target. Byrne is encouraged by HAL’s competitive market positioning and consistent financial performance.
For Q1 FY24, Byrne projects adjusted EPS of $0.75 on revenues of $5.7 billion. The five-star analyst believes that this is achievable as management is focused on growing international revenues by low double-digit growth in Fiscal 2024.
Halliburton Boasts Solid Financials
Halliburton has exceeded analysts’ estimates in all the last eight consecutive quarters. In Q4 FY23, HAL revenue of $5.74 billion rose 2.8% year-over-year, while adjusted EPS of $0.86 was much higher than the Q4 FY22 figure of $0.72 per share.
Also, in Fiscal 2023, revenues grew 13%, while adjusted EPS increased by nearly $1 per share to $3.13 per share.
HAL also increased its regular quarterly dividend by one cent to $0.17 per share, although reflecting a yield of 1.67%, which is below the energy sector’s average. HAL also rewards shareholders with share buybacks and repurchased stock worth $250 million in Q4 FY23.
The company sees improved momentum in its business going forward in 2024 and is well-positioned to meet the growing demands of the oilfield services segment.
Is Halliburton Stock a Good Buy?
With 15 unanimous Buy ratings, HAL stock commands a Strong Buy consensus rating on TipRanks. The average Halliburton price target of $47.33 implies 21.9% upside potential from current levels.
Ending Thoughts
Halliburton could be viewed as a good pick for investors seeking exposure to the energy sector. Although, HAL’s dividends have not been consistent, it does boast consistent and robust financial performance. As the macroeconomic headwinds start easing, the demand for oil and gas (and consequently the demand for oilfield services), is expected to increase.
Analysts are highly bullish about HAL’s stock trajectory and expect robust share price appreciation.
