HAL — Halliburton Company

Q2 2026 adjusted EPS beat by a cent, but management's cautious Q3 sequential revenue guidance triggered a ~5% post-earnings pullback. Since then, elevated oil prices, international contract wins (bp Brazil, TotalEnergies Suriname, Kuwait), and Buy-rated analyst positioning have stabilized sentiment; insider sales and soft near-term guidance keep it from being a strongly bullish setup.

Revenue was essentially flat at $5.7-5.8B per quarter through 2023-2024, sagged in 2025, and is now inflecting upward: Q2 2026 revenue rose 3.7% YoY to $5.71B. The 2025 trough showed up in Q1 2025 EPS of $0.24 and Q3 2025 net income of just $18M, but 2026 has improved steadily - operating income went from $679M in Q1 to $778M in Q2, and Q2 EPS recovered to $0.64 from $0.55 a year earlier. Margins are still below the 2023-2024 highs (Q2 2026 operating margin of 13.6% versus roughly 17-18% in 2023-2024), so this is a recovery off a cyclical low, not a new boom.

At $35.49 as of 2026-08-27, HAL trades at 18.6x trailing EPS of $1.92 - above its own 5-year average P/E of 15.46 - but the trailing multiple is depressed by the 2025 trough. On next fiscal year's estimated EPS of $2.34, the forward P/E is only ~15.1x, right in line with its historical average; P/S of 1.33 also matches the 5-year average of 1.32. TTM free cash flow of ~$1.73B implies a ~5.8% FCF yield. That reads as fairly valued rather than cheap or expensive.

The price is ahead of trailing earnings but only paying fair value for the expected recovery. At ~15x forward EPS, the market is not pricing in a strong international upcycle - it is pricing in modest, steady improvement. Upside to the low-$40s requires either estimates rising above $2.34 on international backlog conversion or multiple expansion toward 17-18x; the main downside risk is a Q3 miss cutting estimates toward $2.20 or below. The October Q3 print is the key deciding event.

As of 2026-08-27, RSI(14) was 58.2 - neutral, with no overbought or oversold signal. Price was 5.2% above the 20-day SMA, 4.8% above the 50-day SMA, and 2.8% above the 200-day SMA, implying a constructive but not extended uptrend. Support sits near the 200-day around $34.50 and the 50-day around $33.85; resistance is roughly $37-38, then the $43.59 high. Entry timing is mediocre at best right now; a pullback toward $34-35 offers a better risk/reward.

• Elevated Brent crude in the $91-93 range, supported by Middle East supply risk, is a tailwind for activity but also creates localized operational friction in HAL's international footprint.
• North American E&P capital discipline is capping domestic growth and pressure-pumping pricing - the main drag on HAL's U.S. segment.
• International and deepwater spending is the offset, with record international revenue and long-cycle awards in Brazil, Suriname, and Kuwait.
• OPEC+ supply decisions and global demand trends will drive rig counts and service pricing; an oil downturn would hit earnings quickly given cyclical leverage.
• Energy-transition capital remains a modest drag on long-cycle oilfield service investment, though oil and gas spending remains strong through 2026.

• Q3 2026 earnings (late October) - confirmation that international strength offsets the soft Q3 domestic guide and keeps FY EPS on track near $2.34.
• Initial execution and ramp of the bp Brazil Bumerangue, TotalEnergies Suriname GranMorgu, and Kuwait contracts, extending multi-year backlog visibility.
• Sustained oil prices above $90 or escalation of Middle East supply risk, which could push producers to accelerate North American drilling.
• Further shareholder-return moves - dividend increases or buybacks - on the back of $1.7B+ TTM FCF.

• Near-term guidance is cautious: if Q3 sequential revenue softness is worse than expected, forward estimates and the stock de-rate.
• A drop in oil prices once the geopolitical risk premium fades would compress activity and margins across the service sector.
• North American weakness could persist longer than expected, keeping domestic margins below historical levels.
• International project delivery risk, including cost inflation, local disruptions, and delays in deepwater/backlog campaigns.
• Cyclical valuation risk - at ~15x forward earnings there is no meaningful margin of safety if the macro picture deteriorates.

As of 2026-08-27, Halliburton is a well-positioned cyclical in the early stages of an international-led recovery, but the stock is already priced for that recovery. The balance sheet is solid, FCF is healthy, and the backlog is growing, yet Q3 guidance is soft and North American activity remains the laggard. With the stock near fair value and no major catalyst until October, the risk/reward is balanced rather than compelling; existing holders can stay, and new buyers should wait for weakness or clearer Q3 confirmation.

Calculated by applying a 16x multiple to the next-fiscal-year EPS estimate of $2.343 - a slight premium to HAL's 5-year average P/E of 15.46 to reflect international backlog momentum - which yields $37.49; this is cross-checked by a ~5.5% FCF yield on TTM FCF of ~$1.73B, giving roughly $37.50.