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Halliburton shares dip despite optimistic market forecast

EditorRachael Rajan
Published 10/24/2023, 03:41 PM
Updated 10/24/2023, 03:41 PM
© Reuters.

Shares of leading oil equipment supplier Halliburton (NYSE:HAL) experienced a 3% drop after the company's latest earnings report did not meet investor expectations, despite favorable oil market conditions. The company's earnings slightly exceeded predictions at $0.79 per share, compared to the forecasted $0.77, but its revenues of $5.8 billion fell short of the anticipated $5.85 billion. This marks a modest 8.2% increase from Q3 2022's earnings.

Investors had been hoping for larger gains given the global oil supply disruptions due to the Israel-Hamas conflict and production cuts from Russia and Saudi Arabia. However, Wall Street analysts have maintained a Strong Buy consensus on HAL stock based on 11 buys in the recent three months, forecasting a potential upside of 22.61%, with an average price target set at $49.45 per share.

On the same day, Jim Cramer on "Squawk on the Street" encouraged investors to remain positive about Halliburton despite a 2% share drop after the Q3 revenue results were announced. Cramer highlighted Halliburton's capital conservation track record and expected increased service demand given oil market conditions, suggesting the company will prosper if oil prices stay stable.

In related news, West Texas Intermediate crude saw a near 3% drop but also recorded a second straight weekly gain and briefly went above $90 per barrel due to potential Middle East output disruptions from the Israeli-Hamas war. The CNBC Investing Club, which exited its Halliburton position in August, is considering oil stocks again amidst recent energy sector mergers and acquisitions activity. It holds a stake in Coterra Energy (NYSE:CTRA), a balanced oil and natural gas company.

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