HALLIBURTON COMPANY (HAL): what the price requires

At today's price, HALLIBURTON COMPANY (HAL) is priced for +4.7% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/HAL

Headline

FieldValue
TickerHAL
CompanyHALLIBURTON COMPANY
Current price$35.20/sh
CompositionCompletion and Production 58% / Drilling and Evaluation 42%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed4.4%
Operating margin today10.0%
Margin compression implied-5.6pp
Implied growth4.7%
Multiple paid16x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 8.5% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.5pp.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.04σ
cohort percentile (of 45 peers)51
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.77x5expensive
Earnings2.45x3expensive
Relative1.85x3expensive
Growth1.65x3expensive

Families that call it expensive: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.1%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$17.192.05xyesFCF base $1.7B, growth -2% (input: historical growth), terminal g 0.5%, WACC 8.1%, 5yr projection
DCF Exit MultipleGrowth$32.061.10xyesExit EV/EBITDA: 4.7x / 9.7x / 14.7x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$19.061.85xyesP/E 12.75x (blended: static sector reference 10x + trailing (TTM) 19x), scenarios: 9.6x / 12.8x / 15.3x (bear / base = reference held flat / bull), EV/EBITDA 7.12x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$19.841.77xyesBV/sh $12.85, ROE (TTM) 14.3%, ke 9.3%
Two-Stage Excess ReturnAsset$24.391.44xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$21.341.65xyesRev $22.2B, growth -2% (input: historical growth; tapered), Terminal P/S: 1.0x / 1.3x / 1.6x (bear / base = today's held flat / bull, cap 6x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$31.811.11xyesNormalized EBIT (5y avg op income, one-time charges added back) $3.26B × (1−18%) / WACC 8.1% → EPV (no growth)
Residual IncomeAsset$25.151.40xyesBV $12.85 + 5yr PV of (ROE (TTM) 14.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$17.991.96xyes√(22.5 × EPS $1.12 × BVPS $12.85) — Graham's conservative floor
EV/EBITDA RelativeRelative$18.941.86xyesEBITDA $3.66B × sector EV/EBITDA 6.0x
FCF YieldEarnings$14.382.45xyesFCF $1678.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$0.9437.45xyesEPS $1.12 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$5.196.78xyesBV $12.85 × (ROIC 3.3% / WACC 8.1%)
P/Sales SectorRelative$31.711.11xyesRevenue $22.17B × sector P/S 1.2x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$12.112.91xyesEPS $1.12 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$5.8b
Net debt / NOPAT (after-tax)3.25x
Net debt / operating income (pre-tax)2.65x
Share count CAGR (buyback)-1.8%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

Anchor on one signal, because in oilfield services the whole bull case usually turns on a single inflection: North American activity. For two years the slow part of Halliburton's business has been the U.S. land market, where revenue fell 6% in 2025, per the 10-K. The bull case is that the trough is passing. Management reported that the frac calendar's idle white space for the first half of 2026 has been eliminated and that inbound calls for spot work from smaller operators are picking up, pointing to early-stage tightening in premium and dual-fuel frac equipment. That is the number that flips the verdict: a fully booked frac fleet with rising spot demand is the leading edge of pricing power returning, and Halliburton guided second-quarter completion-and-production revenue to grow 4% to 6% sequentially with margin improvement.

The international book is the ballast under that recovery. While North America bottomed, Latin America grew 22% year over year to $1.1 billion, led by a multibillion-dollar integrated completions award in Argentina with YPF and activity across Ecuador, Brazil, Mexico, and the Caribbean. International oilfield work is less volatile than U.S. shale because it runs on multi-year national-oil-company budgets rather than the spot-price-sensitive private operators that dominate American land. Halliburton operating "in more tha[n]" a hundred countries, as the 10-K notes, spreads the risk and gives it a diversified demand base that smooths the U.S. cycle.

The capital return shows management's read on its own stock. Halliburton repurchased $100 million of shares in the first quarter, and the finance chief said second-quarter buybacks would be higher than the first and the second half higher than the first half. The share count has been falling about 2% a year, and net debt sits at a manageable 2.3 times operating income. A company accelerating buybacks into an expected activity recovery is signaling that it sees the current price as below where the cycle takes it. The bull case is a diversified oilfield leader catching the upswing in its weakest market while its strongest one carries the load.

Bear Case

The uncomfortable observation a holder would rather skip is that the price has already bought the recovery. Halliburton's revenue did not grow in 2025; it fell 3% to $22.2 billion, with North America down 6% and international down 2%, per the 10-K. Yet at today's price every standard valuation method reads the stock as rich, the asset, earnings-power, peer-multiple, and even the forward-growth lenses all sit below the price. When no family of method reaches the quote on a business whose revenue is declining, the price is paying for an upturn that has been promised but not yet delivered, and the multiple sits in the upper half of the oilfield-services peer range. That is a lot of optimism priced into a cyclical at a moment when its largest market is just beginning to claim it has bottomed.

The deeper problem is the nature of the cycle itself. Oilfield services is downstream of oil prices, and the 10-K is blunt that the business "is directly affected by trends in oil and natural gas prices, which historically have been volatile and are likely to continue to be volatile." Halliburton does not control its own demand; its customers' drilling budgets do, and those budgets swing with commodity prices, OPEC decisions, and the worldwide "political and military actions, and economic conditions" the filing lists as risks. The first quarter showed the exposure directly: the Middle East conflict clipped earnings per share by a few cents in a single month. Today's 11% operating margin reflects a particular point in that cycle, and the price treats it as a base to grow from rather than a peak to defend.

Leverage and concentration sharpen the downside. Net debt of roughly $5.8 billion is moderate at about 2.3 times operating income, but it is fixed while the earnings are not, so a downturn pressures the equity disproportionately. The 10-K also flags receivable concentration with a major customer, the kind of single-name exposure that can turn a regional dispute into a cash-collection problem. The bear case is not that Halliburton is a weak company; it is that an excellent cyclical is priced as if the recovery is certain and the cycle has been repealed, when the recent revenue decline and the every-method-says-expensive pattern argue the price has run ahead of the fundamentals.

Valuation

Halliburton trades at about 16 times company-wide operating income, and inverting that says the market is paying for roughly 4% annual operating-profit growth over five years. That sounds modest, and against the company's own record it is within reach, but the context is what matters: this is a cyclical whose revenue fell 3% in 2025, and the price sits in the upper half of the oilfield-services peer multiple range. The framework labels the priced-in assumption within range, but the more striking fact is what the methods say about the price level itself.

The families of method are unanimous, and that unanimity is the signal. Asset value, earnings power, peer multiples, and even the forward-growth method all read the price as rich, with no family reaching the quote. That pattern is unusual and important: it means the price is not merely a growth premium that the static methods cannot frame; it is a bet beyond what any standard frame supports, including the forward-looking one. For a cyclical, the cleanest interpretation is that the methods are valuing trailing earnings honestly and the price is anticipating an up-cycle that has not yet shown up in the numbers. The peer comparison reinforces it, placing Halliburton above its services cohort, so the optimism is specific to this name, not a sector-wide re-rating.

Solvency bounds the downside without resolving the valuation question. Net debt of roughly $5.8 billion at about 2.3 times operating income is moderate and serviceable through a normal cycle, and the accelerating buyback, $100 million in the quarter with more guided to come, shows management converting cash to shareholders rather than hoarding it. The risk here is not financial distress; it is the cycle. A buyer at this price is underwriting a North American activity recovery and continued international strength to materialize as the methods expect, paying a multiple every standard lens calls rich, and counting on the up-cycle to validate a price that the current, declining fundamentals do not.

Catalysts

Halliburton's first quarter of 2026 held revenue at $5.4 billion, roughly flat year over year, with GAAP earnings per share of $0.55, down from $0.60 a year earlier, partly because the Middle East conflict clipped a few cents in March. The headline was steady rather than strong, but the commentary pointed to an inflection.

The North American recovery signals are the catalyst to track. Management said the frac calendar's idle white space for the first half of 2026 has been eliminated and that spot-work inquiries from smaller operators are rising, indicating early capacity tightening in premium and dual-fuel frac equipment, and it guided second-quarter completion-and-production revenue up 4% to 6% sequentially with 50 to 100 basis points of margin improvement. On the international side, Latin America grew 22% to $1.1 billion, anchored by a multibillion-dollar integrated completions award with YPF in Argentina, so the cadence of international awards and the U.S. frac pricing are the figures that decide the year.

The variables that move the fundamental story are oil and gas prices and the customer drilling budgets they drive, geopolitical disruptions like the Middle East conflict that already hit the quarter, and the pace of the accelerating buyback the company has guided. The next quarterly report will show whether the North American activity inflection management described is converting into the sequential growth and margin gains the price already assumes.

Peer Cohorts (Per Segment, With Filing Citations)

Completion and Production (reported)

Drilling and Evaluation (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Halliburton Q1 2026 results

View the full interactive HAL report on boothcheck