HALLIBURTON COMPANY (HAL): what the price assumes

In the published model solve dated 2026-Q2, anchored at $36.60, HALLIBURTON COMPANY (HAL) is priced for +0.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-24.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/HAL

Headline

What The Price Assumes (Inversion)

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

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.2% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits 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.

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 8.2%); the inversion above states its own rate.

Per-Model Detail (n=14)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

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

Bullet Takeaways

• North America turned in the June quarter, with revenue up 7% sequentially to $2.3 billion on stronger U.S. land stimulation and well construction, while international revenue reached $3.4 billion, the highest second quarter in over a decade.

• The trailing profit the price is measured against is depressed by impairment charges, which is why the price sits above every standard valuation family while the operating-profit growth it actually requires is only about 2.2% a year.

• Net debt of $5.8 billion, about 2.65 times trailing operating income, is the constraint that matters if the North American recovery stalls rather than continues.

Bull Case

The turn everyone was waiting on showed up in North America. Revenue there rose 7% sequentially to $2.3 billion in the June quarter on stronger U.S. land stimulation and well construction activity, and management expects incremental improvement through the rest of the year on the strength of recent contract awards. For a business whose North American exposure has been the drag on the story, a quarter of sequential recovery in the highest-beta part of the portfolio changes the direction of the argument.

International did more than hold the line. Revenue outside North America reached $3.4 billion, up 5% sequentially and the strongest second quarter in more than a decade, with Europe and Africa up 19% on activity in the North Sea, Namibia, Egypt and Angola. That is the half of the business that runs on multi-year national oil company programmes rather than on the spot decisions of shale operators, and it is compounding while the domestic market recovers. Total revenue of $5.7 billion and operating income of $778 million both improved on the March quarter's $5.4 billion and $679 million.

Both segments participated. Completion and Production, at 58% of revenue the larger line, generated $3.2 billion with operating income of $474 million, up 8% sequentially, and Drilling and Evaluation added $2.5 billion, up 5%. Completion work is the earlier cyclical signal because it tracks the decision to bring wells online rather than the decision to drill them, so improvement there tends to lead rather than lag.

The cash story is where the bull case gets its ballast. The June quarter produced $824 million from operations and $668 million of free cash flow, against capital spending guided to $1.1 billion for the full year. Roughly $200 million of stock was repurchased in the quarter, with management signalling a return to that quarterly pace, alongside a declared dividend of $0.17 a share. Share count has fallen about 1.8% a year since 2022. An oilfield services business that funds its equipment, pays a dividend and still shrinks its share count through the soft part of the cycle is being run for owners rather than for scale.

The last piece is the one the trailing numbers obscure. Full-year 2025 operating income of $2.3 billion was reduced by impairments and other charges, and excluding them the company reported adjusted operating income of $3.1 billion. Charges of that kind are real cash and real mistakes, but they are also non-recurring by construction. The earnings base the business actually runs on is meaningfully above what the last twelve reported months show, and the bull case is simply that the market is still marking the company against the depressed figure while the operating run rate climbs back toward the other one.

Bear Case

The trouble with valuing this company is that no single year describes it. Operating income was $3.8 billion in 2024 and $2.3 billion in 2025 on revenue that barely moved, $22.9 billion falling to $22.2 billion. A business where profit can fall by two fifths while revenue barely moves is a business with enormous operating leverage running in both directions, and the June quarter's recovery is one data point inside that swing, not an escape from it. Whatever multiple an investor pays today is a multiple on a number that has proven it can halve.

Which is why the price sits where it does relative to every standard frame. Asset-based work lands about 1.68 times below today's price. The methods that capitalise current earnings power land about 2.31 times below. Peer multiples land about 1.76 times below, and even the forward cash-flow methods land about 1.65 times below. Not one family reaches the price. The multiple on trailing operating profit sits at the very top of the oilfield services peer group, above SLB, Baker Hughes, Weatherford and NOV on the same measure. Some of that is the impairment charges compressing the denominator, and the bull is right about that. But a company whose reported profit is regularly compressed by write-downs on equipment and legacy obligations is a company for which those charges are closer to a recurring cost of doing business than the label suggests.

International was supposed to be the stable half, and it partly wasn't. Middle East and Asia revenue fell 2% in the quarter as conflict reduced activity in Kuwait, Iraq and Qatar. That region carries the long-cycle national oil company work the whole diversification argument rests on, and it turns out to carry political risk that is not correlated with the oil price at all. Europe and Africa growth covered the gap this quarter. There is no rule that says it does so next quarter.

The balance sheet narrows the margin for error. Net debt stands at $5.8 billion, roughly 2.65 times trailing operating income, and that ratio is calculated on the depressed profit figure precisely when it matters most. Leverage in a cyclical business is a ratchet: it looks modest at mid-cycle and doubles as a multiple of earnings without a dollar of new borrowing, simply because the denominator fell. Add capital spending guided at $1.1 billion for the year and the cash available for buybacks in a genuine downturn is a good deal thinner than the current quarter suggests.

What the price needs is not heroic, and that is the fairest statement of the bear case. Roughly 2.2% annual operating-profit growth is what today's price assumes, against a company whose own recent record averages a similar pace. The requirement is reasonable. The risk is not that the hurdle is too high, it is that oilfield services does not deliver steady low-single-digit progress. It delivers three good years and one bad one, and the price has to survive the bad one.

Valuation

Start with the denominator, because for a cyclical it is the whole problem. At $33.24 on July 24, 2026, the market is paying about 15 times the operating income of the last twelve reported months, and that figure carries the impairment charges taken during 2025. The same period on an adjusted basis produced $3.1 billion of operating income against the $2.3 billion reported. Two multiples, both honest, and a wide gap between them.

What the price actually requires is modest: it implies company-wide operating profit growing about 2.2% a year, which sits inside what the business has recently delivered and inside what the sector can plausibly produce. Measured that way the assumption is unremarkable. Measured against the operating margin the company earns today, around 10%, the price is not asking for a margin transformation either.

The methods used to triangulate all disagree with the price in the same direction, which is the signature of a cyclical measured at a low point rather than of an expensive stock. Asset-based work lands about 1.68 times below the price, peer multiples about 1.76 times below, and the earnings-power lenses about 2.31 times below. Even the forward cash-flow methods land about 1.65 times below, held down because they project forward from a trailing revenue line that declined. The one method that normalises profit across a five-year window, capitalising an average operating profit with one-time charges added back, lands within a few percent of today's price. That single reconciliation carries most of the information in this section: on trough earnings the price looks stretched against everything, and on through-cycle earnings it looks ordinary.

Cohort position sharpens it. Against SLB, Baker Hughes, Weatherford, NOV and the smaller pressure pumpers, the multiple on trailing operating profit sits at the top of the group, which is what happens when a peer set's earnings are depressed by different amounts. The composition matters here too: Completion and Production supplies 58% of revenue and Drilling and Evaluation the remaining 42%, and the completion side is the more volatile of the two because it tracks the decision to bring wells online.

The balance sheet sets the floor and the constraint. Net debt of $5.8 billion runs about 2.65 times trailing operating income, a ratio that flatters at mid-cycle and tightens at the bottom without any new borrowing. Against that sit $668 million of free cash flow in the June quarter and a share count falling about 1.8% a year. The company is deleveraging and buying stock at the same time, which is the correct order of operations at this point in a cycle, and the pace of both depends entirely on whether the North American recovery that started this quarter continues.

Catalysts

North America is the variable to track, and management gave it a direction. After a 7% sequential revenue increase to $2.3 billion in the June quarter, the company said it expects incremental improvement in North America through the remainder of the year, citing recent contract awards and growing service demand. Third-quarter results, due in October, are the first checkpoint on whether that plays out as a trend or a single quarter.

The offsetting item is geopolitical. Middle East and Asia revenue fell 2% in the June quarter because conflict reduced activity in Kuwait, Iraq and Qatar. Europe and Africa grew 19% on North Sea, Namibia, Egypt and Angola work and more than covered the shortfall, but the two are independent, and a second quarter of Middle East softness without the European offset would show up directly in the international line that has been carrying the company.

Capital return has a stated run rate. Roughly $200 million of stock was repurchased in the June quarter and management indicated buybacks return to about that quarterly pace, alongside the declared dividend of $0.17 a share and full-year capital spending guided to $1.1 billion. Free cash flow of $668 million in the quarter funds all of it comfortably at current activity levels, which makes the next two quarterly cash flow figures the practical test of whether the buyback pace holds.

Peer Cohorts (Per Segment, With Filing Citations)

Completion and Production (reported)

• SLB (SLB LIMITED/NV)
• FY2025 10-K: …that combine and integrate SLB's technologies, enhancing the Company's ability to support the emerging long-term growth opportunities in each of these market segments. SLB previously reported its results on the basis of four Divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production…
• FY2025 10-K: …SLB recognizes revenue upon the transfer of control of promised products or services to customers at an amount that reflects the consideration it expects to receive in exchange for these products or services. The vast majority of SLB's services and product offerings are short-term in nature. The time between…
• BKR (Baker Hughes Co)
• FY2025 10-K: …and technology portfolio to focus on new energy areas, such as geothermal and CCUS; strengthening its digital architecture; and addressing key energy market themes. The OFSE segment is organized into four product lines. • Well Construction focuses on drilling and includes drilling services (directional drilling,…
• FY2025 10-K: …in currencies other than the functional currency of the Company or its subsidiaries is included in the consolidated statements of income. Revenue from Sale of Equipment Performance Obligations Satisfied Over Time The Company recognizes revenue on agreements for sales of equipment manufactured to unique customer…
• WFRD (Weatherford International plc)
• FY2025 10-K: …develop and produce from their oil and natural gas reservoirs more efficiently. Our products and services are designed to enable our customers to increase production rates while reducing their costs of drilling and production. Reportable Segments We offer our services and technologies in relation to the well life…
• FY2025 10-K: …analyze customer requirements and provide software enabled design input from pre-job planning to installation. Completions offer customers a comprehensive portfolio of completion tools, such as safety valves, production packers, downhole reservoir monitoring, flow control, isolation packers, multistage fracturing…
• NOV (NOV INC.)
• FY2025 10-K: …by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue recognition under long-term construction contracts Description of the Matter As discussed in Note 2 to the consolidated financial statements, the…
• FY2025 10-K: …we believe are reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material. Revenue…
• OII (OCEANEERING INTERNATIONAL INC)
• FY2025 10-K: …expedient to recognize revenue for the amount invoiced when the invoice corresponds directly to the value of our performance to date. We account for significant fixed-price contracts, primarily within our Manufactured Products segment, and to a lesser extent in our Offshore Projects Group ("OPG") and Aerospace and…
• FY2025 10-K: …judgment as to the 69 appropriateness of the observable evidence relating to the facts and circumstances of the contract. If we do not have observable evidence, we estimate stand-alone selling prices by taking a cost-plus-margin approach, using typical margins from the type of product or service, customer and…
• XPRO (Expro Group Holdings N.V.)
• FY2025 10-K: …the customer simultaneously consumes the benefit of the service while it is being rendered, and, therefore, reflects the amount of consideration to which we have a right to invoice. We generally perform services either under direct service purchase orders or master service agreements which are supplemented by…
• FY2025 10-K: …specific engineering costs associated with a project. We also procure products and services on behalf of our customers that are provided by third parties for which we are reimbursed with a mark-up or in connection with an integrated services contract. We also design, manufacture and sell equipment, which is typically…
• NESR (NATIONAL ENERGY SERVICES REUNITED CORP.)
• FY2025 10-K: Services, which aggregate services performed during distinct stages of a typical life cycle of an oil and gas well. 39 Production Services . Our Production Services segment includes the results of operations from services that are generally offered and performed during the completion and production stages of a well's…
• FY2025 10-K: December 31, 2023 Reportable Segment: Production Services $ 878,076 $ 785,642 Drilling and Evaluation Services 423,628 360,273 Total revenue $ 1,301,704 $ 1,145,915 Production Services revenue was $878.1 million for the year ended December 31, 2024, compared to $785.6 million for the year ended December 31, 2023. The…
• RES (RPC, INC.)
• FY2025 10-K: ​ Other (both segments) ​ $ 109,285 ​ 6.8 % ​ $ 111,842 ​ 7.9 % ​ $ 141,187 ​ 8.7 % ​ Technical Services Segment Pressure Pumping : 29.8% of 2025 total revenues. Services are provided to customers throughout Texas and the mid-continent regions of the United States, with a concentration in the Permian basin. We…
• FY2025 10-K: …collection generally occurs between 30 to 60 days after invoicing. As the Company enters into contracts with its customers, it generally expects there to be no significant timing difference between the date the services are provided to the customer (satisfaction of the performance obligation) and the date cash…

Drilling and Evaluation (reported)

• SLB (SLB LIMITED/NV)
• FY2025 10-K: …reduce cycle time and improve efficiency of workflows to allow customers to make better, faster decisions to improve their project economics and reservoir performance. • Digital Operations: Combines the strengths of SLB's oilfield services with advanced digital technologies to deliver more reliable, efficient, and…
• FY2025 10-K: …digital transformations. These services include transition support from on-prem to cloud-based digital solutions, data clean-up and migration, workflow automation - including deployment of workflow solutions built within SLB's global network of Innovation Factori workspaces - and training to further enable customers'…
• BKR (Baker Hughes Co)
• FY2025 10-K: …and technology portfolio to focus on new energy areas, such as geothermal and CCUS; strengthening its digital architecture; and addressing key energy market themes. The OFSE segment is organized into four product lines. • Well Construction focuses on drilling and includes drilling services (directional drilling,…
• FY2025 10-K: 5, the Company expects to recognize revenue of approximately 59 %, 74 %, and 89 % of the total remaining performance obligations within 2 , 5 , and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as the Company…
• NOV (NOV INC.)
• FY2025 10-K: …to assess performance and for resource allocation decisions in the annual budgeting process and in the quarterly performance review processes. Energy Products and Services The Company's Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling,…
• FY2025 10-K: …of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies. Demand for the segment's composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth. Energy Equipment The Company's Energy…
• RES (RPC, INC.)
• FY2025 10-K: …effect on our operations; ● fluctuations in drilling rig count and well completions; ● our concentration of customers in the energy industry and periodic downturns; ● our business depends on capital spending by our customers, many of whom rely on outside financing to fund their operations; ● dependence on our key…
• FY2025 10-K: …and our reliance to a greater extent on the technical expertise and know-how of our personnel to maintain our competitive position; ● our belief that EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow are important indicators of performance; ● our belief that the pressure pumping market remains highly…
• WFRD (Weatherford International plc)
• FY2025 10-K: …develop and produce from their oil and natural gas reservoirs more efficiently. Our products and services are designed to enable our customers to increase production rates while reducing their costs of drilling and production. Reportable Segments We offer our services and technologies in relation to the well life…
• FY2025 10-K: …analyze customer requirements and provide software enabled design input from pre-job planning to installation. Completions offer customers a comprehensive portfolio of completion tools, such as safety valves, production packers, downhole reservoir monitoring, flow control, isolation packers, multistage fracturing…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

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.