Halliburton (HAL) Touches 52-Week High As Crude Rallies

Shares of Halliburton Company (NYSE:HAL) hit a 52-week high of $46.90 on Aug 19, 2016. Shares closed at $46.85, reflecting a solid return of 37.6% year to date. The average trading volume for the last three months aggregated 8,710,253 shares. Over the past 52 weeks, the company’s shares ranged from a low of $27.64 to a high of $46.90.

The improvement on the crude front followed Russia’s plans of meeting OPEC members in September for a possible output cut. This brought a ray of hope for oilfield services major like Halliburton. In details, over the past few trading days, West Texas Intermediate (WTI) crude futures surged more than 20% from a low settlement price of $39.50 on Aug 2. With crude on a bull-run, exploration and production companies will get a strong incentive to produce more oil. This will directly increase contracts for oilfield services players for setting up oil wells.

Moreover, Halliburton is among the top three players in each of its product/service categories, and is present in all major hydrocarbon-producing regions of the world. The company enjoys a strong relationship with both publicly traded and national oil companies worldwide. We also appreciate Halliburton’s cost-cutting initiatives like reducing headcount and consolidating facilities.

Additionally, the company reported narrower-than-expected second-quarter 2016 loss amid the rig count carnage that hit its activity levels and pricing. Most importantly, the company expects rig count to increase modestly during the second half of 2016 which should push up North American activities.

However, following opposition from U.S. and European regulators, Halliburton and Baker Hughes called off their $28 billion merger agreement. Accordingly, Halliburton paid Baker Hughes $3.5 billion in termination fees –one of the highest in U.S. corporate history. This has hurt Halliburton's liquidity.

As a result, Halliburton carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.

HALLIBURTON CO Price and Consensus

Stocks to Consider

Better-ranked players in the energy sector include Matador Resources Company (NYSE:MTDR) , Murphy USA Inc. (NYSE:MUSA) and North Atlantic Drilling Limited (NYSE:NADL) . Each of these players sports a Zacks Rank #1 (Strong Buy).