On Monday, Susquehanna adjusted its financial outlook for Halliburton (NYSE: NYSE:HAL) shares, a prominent oilfield services company. The firm lowered its price target to $46.00 from the previous $49.00 but retained a Positive rating on the stock. This revision follows the release of Halliburton's second-quarter results for 2024 and the company's updated full-year guidance.
Halliburton's recent announcement indicated a projected downturn in North American activities, with an expected 6% to 8% decline in the region's revenue for the year. Despite this, the company's international revenue is forecasted to grow by a low-double-digit percentage in 2024. The contrasting regional outlooks have led to a tempered overall top-line growth estimate of approximately 2% for the year.
The updated model from Susquehanna includes revised projections for Halliburton's 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings per share (EPS). The firm now anticipates Halliburton's EBITDA for 2024 to be around $5.1 billion, a decrease from the previous estimate of $5.4 billion. Additionally, the EPS forecast has been adjusted to $3.16, down from the earlier projection of $3.43.
Despite the downgraded figures, Susquehanna suggests that potential mergers and an increase in gas basin activity could act as catalysts for a rebound in North American operations in 2025. The firm's continued Positive rating reflects this optimism. The new price target of $46 is based on the firm's revised estimates for Halliburton's financial performance.
In other recent news, Halliburton, a major player in the energy sector, has seen multiple analyst firms revise their price targets due to the company's tempered 2024 outlook. Piper Sandler, RBC Capital Markets, and BofA Securities have all reduced their targets, while Citi has maintained its Buy rating.
These actions follow Halliburton's second-quarter results, which revealed a projected decrease in North America revenue guidance for 2024. Despite the revised guidance, Halliburton's second-quarter earnings per share (EPS) of $0.80 met consensus estimates, and its robust free cash flow of $793 million significantly surpassed expectations.
Moreover, the company's net income reached $709 million, boosted by steady international demand, particularly in the Middle East, Europe, and Africa. This international performance helped offset a slight decline in North American revenue. Amid these developments, Halliburton has secured a contract for deep-water well constructions in Namibia, marking a potential boost to the region's oil and gas sector.
However, the company's overall performance has led to a downward revision of EBITDA estimates, with Piper Sandler lowering its projections for 2024 and 2025. Despite these adjustments, the firms remain positive about Halliburton's potential, indicating confidence in the company's future performance. These are the recent developments that investors should note.
InvestingPro Insights
In light of the recent adjustments by Susquehanna, it's worth noting a few key metrics and insights from InvestingPro that may provide additional context for Halliburton's (NYSE: HAL) financial outlook. With a market capitalization of $30.45 billion and a P/E ratio standing at 11.43, Halliburton presents a valuation that speaks to its current market perception. The company's revenue growth for the last twelve months as of Q2 2024 is recorded at 3.42%, which aligns with the modest top-line growth estimate provided by Susquehanna.
Moreover, the dividend yield as of the most recent data is 1.98%, reflecting the company's commitment to maintaining dividend payments for 54 consecutive years, an InvestingPro Tip that underscores Halliburton's appeal to income-focused investors.
InvestingPro Tips suggest that while Halliburton has suffered from weak gross profit margins, with the latest figure at 19.21%, it remains profitable over the last twelve months and analysts predict it will be profitable this year. The stock's current trading near its 52-week low could potentially offer a buying opportunity for long-term investors, considering the company's track record of resilience and the InvestingPro Fair Value estimation at $42.36 USD, which is below the current analyst target of $45 USD.
For interested investors seeking a deeper dive into Halliburton's financial health and outlook, additional InvestingPro Tips are available, which provide valuable insights that could inform investment decisions. To explore further, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and gain access to a suite of comprehensive analysis tools and data points. There are over 9 additional InvestingPro Tips available for Halliburton, each offering nuanced perspectives on the company's financial and market performance.
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