Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Halliburton (HAL), and highlights the potential misalignment of interests between brokerage analysts and retail investors [1][4][9]. Group 1: Brokerage Recommendations for Halliburton - Halliburton has an average brokerage recommendation (ABR) of 1.65, indicating a consensus between Strong Buy and Buy, based on 26 brokerage firms [2]. - Out of the 26 recommendations, 17 are Strong Buy (65.4%) and 1 is Buy (3.9%) [2]. Group 2: Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the best price increase potential [4]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, often issuing five "Strong Buy" recommendations for every "Strong Sell" [5][9]. - The interests of brokerage firms may not align with those of retail investors, leading to misleading recommendations [6][9]. Group 3: Zacks Rank as an Alternative Indicator - The Zacks Rank, which classifies stocks from 1 (Strong Buy) to 5 (Strong Sell), is presented as a more reliable indicator of near-term price performance, driven by earnings estimate revisions [7][10]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in earnings estimates [11]. Group 4: Current Earnings Estimates for Halliburton - The Zacks Consensus Estimate for Halliburton has declined by 1.5% over the past month to $2.63, indicating growing pessimism among analysts regarding the company's earnings prospects [12]. - This decline in consensus estimates has resulted in a Zacks Rank of 4 (Sell) for Halliburton, suggesting caution despite the Buy-equivalent ABR [13].

Company Performance - Halliburton's stock closed at $24.19, reflecting a +0.17% change, which underperformed compared to the S&P 500's gain of 1.12% on the same day [1] - Over the past month, Halliburton's shares have decreased by 8.31%, which is worse than the Oils-Energy sector's loss of 5.86% and the S&P 500's loss of 4.13% [1] Earnings Projections - Halliburton is expected to report earnings of $0.61 per share, indicating a year-over-year decline of 19.74% [2] - The consensus estimate for revenue is projected at $5.27 billion, reflecting a 9.27% decrease from the same quarter last year [2] - For the full year, earnings are projected at $2.64 per share and revenue at $22.28 billion, representing declines of -11.71% and -2.88% respectively from the previous year [3] Analyst Estimates and Rankings - Recent changes to analyst estimates for Halliburton suggest a favorable outlook on the company's business health and profitability [4] - The Zacks Rank system currently rates Halliburton at 4 (Sell), with a downward shift of 1.43% in the consensus EPS estimate over the past month [6] Valuation Metrics - Halliburton is trading with a Forward P/E ratio of 9.16, which is lower than the industry's average Forward P/E of 13.27 [7] - The company has a PEG ratio of 3.39, compared to the Oil and Gas - Field Services industry's average PEG ratio of 1.49 [7] Industry Context - The Oil and Gas - Field Services industry, which includes Halliburton, holds a Zacks Industry Rank of 147, placing it in the bottom 42% of over 250 industries [8]

Group 1 - Halliburton Company and Sekal AS have achieved a significant technological breakthrough in upstream oil operations by deploying the world's first automated on-bottom drilling system, integrating Halliburton's LOGIX™ automation and Sekal's DrillTronics® [1][3] - The new system allows for real-time drilling optimization, ensuring precise well placement while enhancing safety and efficiency through advanced rig automation control [1][3] - The successful deployment of this technology on a well for Equinor ASA on the Norwegian Continental Shelf demonstrates the viability of automated drilling technology in the oil and gas industry [2][3] Group 2 - Halliburton's LOGIX™ automation provides a digital transformation of drilling solutions, reducing operational risks and ensuring reliable and consistent well delivery [5] - The LOGIX® platform integrates real-time steering controls, collision avoidance, and visualization, autonomously mitigating drilling dysfunctions to optimize penetration rates [5] - The advancements in automated drilling are expected to redefine efficiency, safety, and performance in energy exploration [3]

Core Insights - Halliburton Company has introduced the EcoStar® electric tubing-retrievable safety valve (eTRSV) technology, marking a significant advancement in well safety and efficiency services [1] - The eTRSV technology aims to eliminate hydraulic actuations from safety valve systems, enhancing operational efficiency and personnel safety while reducing infrastructure needs [4][6] Group 1: Technological Innovation - The EcoStar eTRSV represents a breakthrough in the upstream oil industry, streamlining operations and improving field economics [4] - This second-generation product builds on the success of the first electric TRSV, which won the OTC Spotlight on New Technology Award in 2017 [1][7] - The eTRSV enhances reliability by isolating actuation components from tubing fluid and pressure, incorporating real-time position sensing and valve health monitoring [6] Group 2: Market Position and Growth Potential - Halliburton's focus on automation, electrification, and digital solutions is expected to drive long-term revenue growth and strengthen customer relationships [2][3] - The full electrification of wellbores through eTRSV is anticipated to improve completion performance and maximize asset value for customers [5] - The introduction of eTRSV aligns with operators' priorities for efficiency and cost reduction, creating a positive trajectory for Halliburton and its stakeholders [3]

Core Insights - Halliburton reported revenue of $5.61 billion for the quarter ended December 2024, a decrease of 2.3% year-over-year, with EPS at $0.70 compared to $0.86 in the same quarter last year [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $5.64 billion, resulting in a surprise of -0.55%, while EPS met the consensus estimate [1] Revenue Breakdown - North America revenues were $2.21 billion, missing the average estimate of $2.24 billion, reflecting an 8.7% decline year-over-year [4] - Middle East/Asia revenues reached $1.65 billion, exceeding the average estimate of $1.62 billion, marking an 8.6% increase year-over-year [4] - Europe/Africa/CIS revenues were $795 million, surpassing the average estimate of $744.06 million, showing a 3.7% increase year-over-year [4] - Latin America revenues totaled $953 million, falling short of the average estimate of $1.05 billion, indicating a 7.5% decline year-over-year [4] Segment Performance - Drilling and Evaluation revenues were $2.43 billion, slightly above the average estimate of $2.42 billion, with a year-over-year change of +0.4% [4] - Completion and Production revenues were $3.18 billion, below the average estimate of $3.22 billion, reflecting a 4.2% decline year-over-year [4] - Operating income for Completion and Production was $629 million, slightly above the average estimate of $622.38 million [4] - Corporate and other reported an operating loss of $65 million, better than the average estimate of -$96.81 million [4] - Operating income for Drilling and Evaluation was $401 million, below the average estimate of $416.96 million [4] Stock Performance - Halliburton shares have returned -10.2% over the past month, contrasting with the Zacks S&P 500 composite's +3.9% change, indicating potential underperformance in the near term with a Zacks Rank 4 (Sell) [3]

Revenue and Financial Performance - Total revenue remained flat in 2024 compared to 2023, with international revenue increasing by 6% and North America revenue decreasing by 8%[16] - Approximately 40% of consolidated revenue in 2024 was derived from the United States, down from 44% in 2023[22] - The company returned $1.6 billion to shareholders through buybacks and dividends, consistent with its capital returns framework[16] - Capital expenditures were maintained at 6% of revenue, aligning with the target range of 5% - 6%[16] - The company aims to return at least 50% of annual free cash flow to shareholders through dividends and share repurchases, but this is subject to financial results and other factors[89] - The ability to declare dividends and repurchase shares is contingent on consistent free cash flow generation and available capital[90] Operational Efficiency and Safety - Operating margins for the Completion and Production segment were 20%, while the Drilling and Evaluation segment had 16% operating margins[16] - Total recordable incident rates improved to 0.24 in 2024 from 0.25 in 2023, indicating enhanced safety performance[37] - The company plans to continue driving efficiencies through the deployment of digital and automation technologies[16] - The company hired about 6,800 new employees in 2024, with a voluntary turnover rate of 8%[33] Market and Industry Risks - The demand for the company's services is sensitive to oil and natural gas prices, which are historically volatile and can significantly impact exploration and production activities[53] - Factors affecting oil and natural gas prices include supply and demand levels, OPEC+ production decisions, and governmental regulations[54] - The company’s business is dependent on capital spending by customers, and reductions in such spending could adversely affect its operations and financial condition[55] - Severe weather conditions could materially affect the company's operations, particularly in regions like Canada and the Gulf of Mexico[57] - Constraints in the supply of raw materials and electric power could adversely affect the company's business and consolidated results of operations[62] - Price increases from vendors for raw materials and transportation could have a material adverse effect if the company cannot pass these costs to customers[63] Regulatory and Compliance Challenges - Compliance with U.S. and international regulations is critical, as violations could materially affect the company's operations and financial condition[66] - The company is subject to complex and changing laws regarding import/export activities, which could lead to delays and penalties[69] - Future laws or regulations on hydraulic fracturing could make it more difficult to complete oil and gas wells, adversely impacting operations[73] - Liability for environmental cleanup costs could be substantial, affecting the company's financial condition[74] - Ongoing IRS audits regarding tax filings could result in adverse outcomes, impacting the company's financial results[81] Environmental and Technological Initiatives - The company expanded Halliburton Labs to a total of 38 participant and alumni organizations, focusing on sustainability and energy transition[16] - The company has invested considerable resources in developing hydraulic fracturing technologies, focusing on environmentally friendly options for hydraulic fracturing fluid additives[42] - The company has not faced any environmental liability claims related to hydraulic fracturing to date, although future obligations cannot be assured[44] Strategic Decisions and Acquisitions - A strategic decision was made to market a portion of the chemical business for sale in the third quarter of 2024[18] - Acquisitions and investments may not yield anticipated benefits and could present unforeseen risks, potentially impacting financial performance[95] Political and Economic Risks - The company is exposed to political and economic instability, particularly in regions such as the Middle East and North Africa, which could adversely affect operations and financial condition[84] - Risks include civil unrest, acts of terrorism, and currency fluctuations, which may lead to increased operational costs and disruptions in supply chains[85] - Changes in U.S. foreign trade policies could impose additional trade barriers and tariffs, adversely affecting the company's business[68] - Significant foreign currency exchange risks exist, particularly in countries with restricted cash repatriation, impacting the ability to convert profits into U.S. dollars[92] Management and Operational Risks - The company faces challenges in attracting and retaining technical personnel, which could increase costs and impair growth potential[65] - Integrated project management services may expose the company to additional risks, including cost overruns and delays due to reliance on third-party subcontractors[60] - The company faces challenges in managing joint ventures, where partner actions could adversely affect operations and financial outcomes[98] - The loss of significant customers or delays in payments could materially affect the company's financial results, as no single customer accounts for more than 10% of revenue[93][94] - The loss of key executive officers could have a material adverse effect on the company's operations and overall business[99] - Cybersecurity incidents pose a risk to the company's operations, with past incidents resulting in significant costs and operational disruptions[86]

Core Viewpoint - Halliburton Company (HAL) has experienced a significant decline in stock value, hitting a 52-week low of $25.16, reflecting a nearly 21% drop over the past year, primarily due to its heavy reliance on North American operations facing pricing pressures and reduced drilling activity [1][4]. Company Performance - Halliburton's stock has underperformed compared to the Zacks Oil and Gas Field Services industry, which gained 9.9%, and its peer SLB, which fell 10% during the same period [1]. - The company generates over 40% of its revenues from North America, making it more susceptible to regional economic slowdowns compared to peers like SLB and Baker Hughes, which derive only 20-25% of their revenues from the region [3]. Financial Estimates - The Zacks Consensus Estimate for Halliburton's 2025 EPS has decreased by 10% over the past 30 days, from $2.97 to $2.67 [4]. - Current estimates for the upcoming quarters and years show a decline in expected EPS, with the current year (2025) estimate at $2.67, down from $3.11 two months ago [5]. Revenue Trends - North American revenues fell by 8% year-over-year in 2024, with expectations of further low- to mid-single-digit declines in 2025 due to lower negotiated pricing for pressure pumping services [6]. - The U.S. rig count is trending downward, contributing to a slowdown in completion activity and oil demand growth [6]. Profitability Challenges - Halliburton's Completion & Production operating margin was 20% in the December quarter, but a sequential decline of 1.75-2.25% is expected in the January-March period [7]. - The company faces margin compression, with operating margins in the Completion & Production segment declining by 49 basis points due to weaker North American stimulation activity [8]. Tax and Cost Pressures - Rising tax expenses are projected to increase by 300 basis points to 25.5% in 2025, alongside higher interest costs, threatening Halliburton's ability to maintain strong margins [9]. International Growth Outlook - While international revenues grew by 6% in 2024, growth is expected to stall in 2025, primarily due to a decline in activity in Mexico [10]. - Excluding Mexico, international revenues are projected to grow at a low- to mid-single-digit rate, insufficient to offset losses in North America [10]. Valuation Concerns - Halliburton's stock trades at a forward Price/Earnings multiple of 9.77X, which is higher than its three-year low of 8.10X, raising concerns about the justification of this premium given declining revenues and margin pressures [12]. Positive Developments - The company is investing in advanced drilling technology and artificial lift, which are expected to generate $2.5-$3 billion in annual revenues over the next three to five years [13]. - Halliburton continues to generate solid free cash flow, reporting $1.1 billion in Q4 2024 and $2.6 billion for the full year, with a focus on capital discipline [14]. Final Assessment - Given the heavy North American exposure, margin compression, and slowing international growth, Halliburton's outlook for 2025 appears challenging, leading to a Zacks Rank of 5 (Strong Sell) [16][17].

Group 1 - Halliburton Company (HAL) has secured a significant offshore drilling contract with Petrobras (PBR), marking its largest service contract with the Brazilian energy company [1] - The contract will begin in 2025 and encompasses integrated drilling services for a duration of three years, enhancing Halliburton's operations in Brazil's pre-salt and post-salt regions [1] Group 2 - Halliburton plans to utilize advanced technologies such as the iCruise® intelligent rotary steerable system, LOGIX™ automation platform, EarthStar® ultra-deep resistivity service, and BaraLogix® real-time service to optimize drilling operations [2] - These technologies aim to improve well placement accuracy, reduce well time, enhance consistency in well construction, and address drilling fluid challenges through predictive analytics [2] Group 3 - Investors in the energy sector may consider SM Energy Company (SM) and Sunoco LP (SUN) as potential investment opportunities [4][5] - SM Energy is projected to experience a 15.11% year-over-year growth in earnings for 2024, while Sunoco is expected to see a substantial 184.11% year-over-year growth in the same period [4][5]

Halliburton Co. (HAL) is expecting a soft North American energy services market in 2025. This Zacks Rank #5 (Strong Sell) is expected to see declining earnings this year.Halliburton is a leading provider of products and services to the energy industry worldwide. Founded in 1919, it provides technologies, products and services that help customers maximize the value of their assets throughout their life cycle.Halliburton Meets on Earnings in the Fourth QuarterOn Jan 22, 2205, Halliburton reported its fourth q ...

Halliburton's (NYSE: HAL ) stock has continued to perform poorly in recent months as its financials slowly deteriorate. This is not necessarily surprising, given tepid oil and gas demand growth and discipline on the part of operators in supportRichard Durant is the leader of Narweena, an asset manager focused on finding market dislocations that are the result of a poor understanding of a businesses long-term prospects. Narweena believes that excess risk adjusted returns can be achieved by identifying busine ...