FBR Capital Raises Price Target on Halliburton (HAL) to $53 Following Strong 2Q
FBR Capital reiterated an Outperform rating on Halliburton (NYSE: HAL), and raised the price target to $53.00 (from $49.00), following the company's 2Q earnings report. HAL posted an EPS of ($0.14), beating consensus estimates of ($0.19) on higher EBIT and lower taxes.
Analyst Thomas Curran commented, "Despite both beating for 2Q and indicating that the NAM upcycle has begun, HAL saw its stock fall 1.6% (versus a flat OSX) as we think some were disappointed, for the NAM division, by management’s 3Q16 guidance for quarter-over-quarter margin improvement (100-200 bps) and refusal to quantify its longer-term expectations for pricing. However, we came away with bolstered confidence as our thesis has assumed that margin would rebound slowly and on a combination of share gains, technology traction, efficiency initiatives, and, eventually, net pricing. HAL not only delivered incremental support for those first three margin ingredients (e.g. Q10 conversion hit 70%), but also shared a frac demand intensity outlook that led us to raise our industry utilization trajectory and, thus, HAL estimates. Applied to new 2017E EBITDA, our focal multiple of 16.7x raises our price target from $49 to $53."
For an analyst ratings summary and ratings history on Halliburton click here. For more ratings news on Halliburton click here.
Shares of Halliburton closed at $44.28 yesterday.