On Tuesday, Jefferies adjusted its outlook on Halliburton (NYSE:HAL), a leading oilfield services company, by reducing the price target to $46.00 from the previous $47.00. Despite the price target adjustment, the firm maintained its Buy rating on the stock. The adjustment comes as the market looks ahead to the company's future performance, with particular attention on the fiscal year 2025.
The firm anticipates that Halliburton will deliver third-quarter results for 2024 that align with current expectations, projecting revenues of approximately $5.84 billion, EBITDA around $1.27 billion, and earnings per share (EPS) at $0.76. The full-year outlook remains reiterated by the analyst.
Looking forward to 2025, Jefferies has moderated its growth estimates for Halliburton. The firm now models a 7% year-over-year growth in international revenue, a slight decrease from the previously forecasted 9%. Additionally, North American (NAM) revenue is expected to remain flat, revising the earlier prediction of a 1% increase.
The revised price target reflects these updated expectations, signaling a more cautious but still positive perspective on Halliburton's growth trajectory and financial performance in the coming year. The company is set to provide more detailed guidance on its fiscal year 2025 during the upcoming earnings call, which will offer investors further insights into its strategic plans and financial outlook.
In other recent news, Halliburton has been the focus of significant developments. The company reported second-quarter earnings per share (EPS) of $0.80, in line with consensus estimates, and a robust free cash flow of $793 million, which greatly exceeded expectations. However, its revenue of $5.83 billion fell short of projections, primarily due to lower than expected revenue in the North American market.
Halliburton also declared a quarterly dividend of $0.17 per share for the third quarter of 2024. This regular financial practice underscores the company's commitment to providing returns to its shareholders. Despite these financial results, RBC Capital Markets downgraded Halliburton's stock from an Outperform rating to Sector Perform, citing less attractive positioning in the global Exploration & Production cycle.
The company also faced a significant cybersecurity breach which resulted in unauthorized access and data exfiltration from its systems. However, Halliburton stated that it has not experienced, and does not anticipate, a material impact on its financial condition or results of operations.
InvestingPro Insights
As investors consider Jefferies' revised outlook on Halliburton, real-time data from InvestingPro offers additional context to the company's financial health and market performance. Halliburton is currently trading at a P/E ratio of 9.93, indicating that it may be undervalued relative to its near-term earnings growth. This aligns with the InvestingPro Tip highlighting the stock's low P/E ratio in comparison to its earnings growth potential. Additionally, the company's revenue has seen a growth of 3.42% over the last twelve months as of Q2 2024, with a gross profit margin of 19.22%, which does suggest some concerns about profitability as noted by another InvestingPro Tip regarding weak gross profit margins.
Despite the recent price target reduction, Halliburton has maintained dividend payments for 54 consecutive years, with a current dividend yield of 2.27%. This long-standing commitment to returning value to shareholders is a testament to the company's financial resilience. For investors seeking stability, the stock's low price volatility, as per another InvestingPro Tip, may offer some reassurance in turbulent market conditions.
For those interested in deeper analysis, InvestingPro provides a wealth of additional tips—there are 9 more listed on the platform that can help investors make informed decisions. Halliburton's next earnings date is on November 7, 2024, which will be a pivotal moment for investors to assess the company's performance and future outlook. With a market cap of $26.44 billion and a fair value estimation by InvestingPro at $40.21, the data suggests that Halliburton may have room for growth, supporting a cautiously optimistic view as we approach fiscal year 2025.
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