Tag Archives: NYSE:HAL

Halliburton: Zacks’ Bull of the Day Play

One of the bright spots about being at Zacks is I get to see EPS trends develop before most other people. My boss keeps a meticulous database of EPS estimates and clues us in to moves as they develop. The big story heading into Q4 earnings has been the Trump rotation and the rally we’ve seen since Election Day. Hiding behind those headlines is 4.7% EPS growth on the S&P 500. If you dig a little deeper, you’ll see that the energy sector is set for 7.4% EPS growth. This bucks the trend of 8 consecutive quarters of contraction.

Further, onshore oil exploration and production expenditures have been estimated to increase by as much as 45% by some analysts. Nobody has gained more market share in this business than today’s Bull of the DayHalliburton (HALFree Report) . Halliburton is currently a Zacks Rank #1 (Strong Buy) in a sector that ranks in the Top 13% of our Zacks Sector Rank.

A big reason for the bullish Zacks Rank is the recent earnings estimate revisions to the upside from analysts. Five analysts have increased their estimates for the current quarter while eight have done so for next year. The most dramatic increase can be seen in next year’s consensus number. Sixty days ago, analysts were expecting 96 cents per share. Now they are expecting to see $1.12.

This underlying bullish sentiment can be seen in the stock chart which has rallied sharply off the lows of 2016. Increasing estimates have allowed the stock to make two distinct moves this year. The first was a bounce off a double bottom near $27 in February. That move took shares to $46.69 before running out of steam in June. A consolidation period developed from then until October when speculation of an OPEC deal helped boost oil prices. A second wave of optimism pushed shares through the top end of the consolidation range and on to a fresh 52-week high just shy of $57.

The stock appears to be in another consolidation here ahead of earnings due out Monday January 23rd before the market opens. With the commodity channel index coming down from an overbought condition over 100 and crossing over the zero line, a short term “Sell” signal was given. However, often times breakouts ignore this signal if there’s not follow through from the CCI lower and push higher. I’m bullish heading into the report.

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Halliburton: Zacks’ Bear of the Day Play

Halliburton Company (HALAnalyst Report) continues to feel the pressure of the weak energy industry. This Zacks Rank #5 (Strong Sell) is expected to see declining earnings the next 2 years.

Halliburton provides services and products to the energy industry worldwide. It offers products to customers from exploration to drilling to well construction and completion to optimizing production.

Beat on Earnings in Q3 But Revenue Declined

On Oct 19, Halliburton reported third quarter results and surprised the Street by actually beating the Zacks Consensus by 4 cents.

However, total company revenue fell 6% to $5.6 billion sequentially. North America led the decline, falling 7% sequentially, due to continued declines in activity and pricing pressure.

Mirroring what Schlumberger said, it saw another step down in activity in the industry in the third quarter.

It continues to move forward with its acquisition of Baker Hughes, however. That deal is still expected to close later this year.

Analysts Down Beat

There’s nothing the energy companies can do but admit that the market conditions are challenging.

But the turnaround doesn’t seem imminent either.

16 estimates were cut for the full year in the last 30 days. It has pushed the Zacks Consensus down to $1.47 from $1.60. That is an earnings decline of 63% compared to 2014 when it made $4.02.

The analysts don’t see a turnaround in 2016 either. Earnings are expected to decline another 14%.

Are Shares a Deal?

Like the rest of the energy industry, Halliburton’s shares have plunged.

But they’re not exactly a deal either with a forward P/E of 26. And earnings show no sign of a recovery soon.

If you must buy a stock in the energy sector, consider only those with the best Zacks Ranks. Gulfmark Offshore, Inc. ((GLFSnapshot Report) is a Zacks Rank #2 (Buy).

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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.

Halliburton: Zacks’ Bear of the Day Play

When I’m looking for a stock to be my “Bear of the Day” I look for weak stocks in a weak industry. So you see it’s easy for me to look at a Zacks Rank #5 (Strong Sell) in an industry that ranks in the bottom 18% of the 265 industries we rank with our Zacks Industry Rank, and find myself a bearish idea. But when that stock also happens to be in the energy business that’s taken the biggest hit this year, I almost feel like I’m making it too obvious.

Falling crude prices have put pressure on companies across the energy sector. Today’s “Bear of the Day” Halliburton (HALAnalyst Report) is one of the world’s largest providers of products and services to the energy industry. The company serves the upstream oil and gas industry throughout the lifecycle of the reservoir. It’s no wonder that business would be struggling as oil is becoming cheaper and cheaper as more is brought to market.

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You don’t have to take my word for it. Recently, ten analysts have revised their earnings estimates to the downside for the current year, while eleven have done so for next year. Most of that bearish change took place between thirty and sixty days ago. But in the last week, another round of negative revisions have come through, dropping the Zacks Consensus Estimates even further. Currently, the consensus for the current year has gone from $1.68 to $1.60, while next year’s number has fallen from $1.95 to $1.71.

It’s no wonder why shares have dropped from nearly $74 to $36 over the last couple of years. This year actually started off bullish for shares of HAL, until the stock ran out of momentum just shy of $50 in May. From there the slide has been very consistent. The 52-week low on August 24th still sits over 15% away from where shares currently trade.

Investors looking for other ideas in the oil services industry should look at Zacks Rank #2 (Buy) stocks CHC Group (HELISnapshot Report) and Exterran Holdings (EXHSnapshot Report).

Be sure to click FOLLOW THE AUTHOR above to stay on top of all the hot momentum stocks at Zacks.com. David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of “Trending Stocks”