Market Overview

UPDATE: Oppenheimer Initiates Coverage On Halliburton

Share:

Oppenheimer initiated coverage on Halliburton Company (NYSE: HAL) with an Outperform rating and $71 price target.

Analyst James Schumm noted that “Halliburton's stock has retreated ~40 percent in conjunction with falling oil prices and the proposed merger with Baker Hughes. However, we believe the risk/reward is skewed very positively as the market is pricing in significant reductions in activity and, we think, taking a myopic view on the combination with Baker.

“The proposed merger will create a more valuable entity that can more effectively compete with Schlumberger internationally and will remove a major competitor from the marketplace. Meanwhile, Halliburton continues to implement self-help measures to improve profitability, FCF generation and strengthen its balance sheet.”

Schumm believed investors who “look past the uncertainty in 2015 will be handsomely rewarded over the next two years.”

The analyst report claimed that “despite potential headwinds from lower oil prices, we believe these will be offset by improvements in the underlying business. A reduction in Halliburton’s capital intensity and an expected improvement in margins are estimated to lead to substantial free cash flow generation which will support further share repurchases and strengthen its solid balance sheet.”

Schumm concluded that the “current valuation does not reflect the quality of this business.”

The $71 price target was derived using 13x the firm’s 2016E HAL-BHI EPS estimates and 7x EEV/EBITDA.

Halliburton recently traded at $41.44, up 3.19 percent.

Latest Ratings for HAL

DateFirmActionFromTo
Oct 2020BMO CapitalInitiates Coverage OnMarket Perform
Jul 2020Credit SuisseMaintainsNeutral
Jul 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for HAL
View the Latest Analyst Ratings

 

Related Articles (HAL)

View Comments and Join the Discussion!

Posted-In: James Schumm OppenheimerAnalyst Color Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
HTBairdMaintains6.0
DRHBairdMaintains7.0
BHRBairdMaintains5.0
AHTBairdMaintains3.0
VCELBTIGMaintains30.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com