Halliburton Company (NYSE:HAL) shares are trading lower on Wednesday.
Goldman Sachs Analyst Neil Mehta reiterated a Buy rating on the stock, with a price forecast of $36.
Halliburton reported a fourth-quarter revenue decline of 2.3% year over year to $5.61 billion, missing the consensus of $5.63 billion. Completion and production revenue fell 4.2% year-over-year to $3.2 billion, with operating income of $629 million.
The analyst noted that the revenue decline was primarily due to a decline in Completion and Production, partially offset by Drilling and Evaluation. North American revenue was 7% below the analyst estimate, while international revenue was 3% higher.
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Mehta writes that free cash flow for the quarter was $1,104 million, beating the analyst estimate of $930 million and the consensus of $1,045 million. This improvement was attributed to better working capital and lower capital expenditures ($426 million vs. analysts’ estimate of $454 million).
During the quarter, the company repurchased approximately $309 million in common shares, in line with the analyst estimate of $310 million.
The analyst is unsure about revenue growth by region in 2025 and seeks clarity on activity expectations in the international market, particularly in the Middle East.
Mehta has concerns about how investors should view long-term margin expansion, especially in a flat activity environment.
Additionally, the analyst remains ambiguous about Halliburton’s future involvement in the energy space, including its partnership with VoltaGrid. Finally, there is uncertainty about how return on capital should be addressed in 2025, the analyst highlights.
Price action: HAL shares are trading down 1.51% at $29.09 at last check on Wednesday.
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|
Date |
Firm |
Action |
Of |
TO |
|---|---|---|---|---|
|
January 2022 |
Morgan Stanley |
Maintains |
Overweight |
|
|
January 2022 |
J.Morgan |
Updates |
Neutral |
Overweight |
|
January 2022 |
Morgan Stanley |
Updates |
equal weight |
Overweight |
See more analyst ratings for HAL
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This article Halliburton’s Weak Revenue Delays Estimates, Goldman Sachs Analyst Seeks Clarity on 2025 Activities originally appeared on Benzinga.com
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