Halliburton (HAL) PT Lowered to $35 at Benchmark

Benchmark analyst Kurt Hallead lowered the price target on Halliburton (NYSE: HAL) to $35.00 (from $40.00) while maintaining a Buy rating.

The analyst said, " Management cuts 2025 Outlook. Guidance mid-point puts Revenue and EBITDA 1% and 5% below consensus, respectively. Revenue and Margins to be dragged down by Mexico and North America… 2025 Revenue and Margins to be dragged down by lower activity in Mexico and pricing pressure in North America. Eastern Hemisphere business on pace to grow 3-5%. Company expects new technologies in Directional Drilling, Well Intervention, and Artificial Lift and market growth for unconventionals to boost revenues $2.5-3bn above its base line run rate over the next 3-5 years. Strong FCF seen supporting shareholder allocations of at least $1.6bn, in-line with 2024… North America revenue will be down low to mid-single digits vs 2024 but flat with 2H24. This is in-line with market expectations. Enthused by the distributed power opportunity. The business is very similar to frac re: field ops, maintenance, uptime etc. It’s a business model they understand and they like the growth profile. We estimating C&P Revenue and Margins (largely driven by US frac) to be down 2.5% and 250bps, respectively. Lower pricing in the US will negatively impact margins. Its US frac fleet is 90% committed next year. E-fleets will make up half of HAL’s US fleet by end of 2025. International seen flat vs 2024 with lower activity in Mexico offsetting 3-5% growth in Eastern Hemisphere. Roughly 60% of company revenue is derived from international and half tied to offshore drilling programs. The overall international outlook is consistent with peer commentary. We have D&E Revenue and Margins running flat vs 2024 as this segment skews more international. Strong presence in offshore markets and Saudi unconventional gas should help offset lower activity in Mexico."

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