- Investors may be wondering whether Halliburton at around US$37.80 is still offering value after a strong run, or if most of the opportunity is already priced in.
- The stock has been volatile in the short term, with a 0.5% decline over the last week. However, the 30-day return of 9.1%, year-to-date return of 27.7% and 1-year return of 76.0% mean many investors are reassessing both upside potential and risk.
- Recent coverage of Halliburton has focused on its role as a major energy services provider and on how investor sentiment has shifted toward the sector, which helps explain some of the stronger share price performance. Commentary has also highlighted how capital spending trends in energy and expectations for service activity are feeding into views on the company’s long-term prospects.
- Halliburton currently scores 4 out of 6 on Simply Wall St’s valuation checks, as shown by its valuation score. The rest of this article will assess that score across multiple valuation methods and will point to a more complete way to think about value at the end.
Find out why Halliburton's 76.0% return over the last year is lagging behind its peers.
Approach 1: Halliburton Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting the company’s future cash flows and discounting them back to today’s value. It tries to answer a simple question for you: what are those future dollars worth right now?
For Halliburton, the model used is a 2 Stage Free Cash Flow to Equity approach, built on cash flow projections in $. The latest twelve month free cash flow is about $1.6b. Simply Wall St then uses analyst forecasts and its own extrapolations, which point to free cash flow of $2.85b in 2030, with a path that includes projected figures such as $1.90b in 2026 and $2.34b in 2029 before discounting. Each future cash flow is discounted back to the present and summed to estimate what the equity might be worth today.
This process results in an estimated intrinsic value of US$79.43 per share. Compared with the recent share price around US$37.80, the DCF output suggests the stock is 52.4% undervalued on these assumptions.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Halliburton is undervalued by 52.4%. Track this in your watchlist or portfolio, or discover 64 more high quality undervalued stocks.
Approach 2: Halliburton Price vs Earnings
For profitable companies, the P/E ratio is a straightforward way to connect what you pay for a share with the earnings that support it. It helps you see how many dollars you are paying today for each dollar of current earnings.
What counts as a “normal” or “fair” P/E depends on how the market views a company’s earnings growth potential and risk. Higher growth or perceived resilience can justify a higher multiple, while more uncertainty or weaker growth expectations typically point to a lower one.
Halliburton trades on a P/E of 24.6x, compared with an Energy Services industry average of 26.0x and a peer group average of 23.5x. Simply Wall St’s Fair Ratio for Halliburton is 26.4x. This is its proprietary estimate of what a reasonable P/E could be, given factors such as earnings growth profile, industry, profit margins, market cap and company specific risks.
This Fair Ratio adds context that simple peer or industry comparisons miss because it adjusts for Halliburton’s own characteristics rather than assuming all companies should share the same multiple. With the current P/E of 24.6x sitting below the Fair Ratio of 26.4x, the shares screen as undervalued on this metric.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Halliburton Narrative
Earlier it was mentioned that there is an even better way to understand valuation. It helps to look at Narratives, which let you set a clear story for Halliburton, tie that story to specific forecasts for revenue, earnings and margins, and then see the Fair Value that falls out of those assumptions on Simply Wall St’s Community page. On that page, investors already share views that range from a bullish Narrative with a Fair Value of about US$46.03 to a cautious one closer to US$28.17, along with a midpoint view around US$31.72. All of these update automatically as fresh news or earnings arrive, so you can compare each Fair Value to the current share price and decide whether Halliburton looks priced above or below the story you believe.
For Halliburton however we will make it really easy for you with previews of two leading Halliburton Narratives:
Start with a bullish storyline if you think the market is still underestimating what the company can earn.
Fair value in this bullish narrative: US$46.03 per share.
Implied discount to that fair value at the last close of US$37.80: about 18% undervalued.
Revenue growth used in this storyline: 5.17% per year.
- Focus is on wider use of automation, digital tools and advanced services in international markets, with the view that this could support higher margins and more recurring revenue than many models currently assume.
- Assumptions include earnings rising to US$2.9b by about 2029, with profit margins at 11.4% and the shares on a P/E of 15.1x, which is below the Energy Services industry multiple cited earlier.
- This view still flags risks from decarbonization, regulation and competition, so the bullish takeaway depends on your comfort with those uncertainties and your own revenue and margin expectations.
If you lean toward caution, there is also a version of the story that says recent enthusiasm may have gone too far.
Fair value in this bearish narrative: US$28.17 per share.
Implied premium to that fair value at the last close of US$37.80: about 34% overvalued.
Revenue trend used in this storyline: about 0.34% annual decline.
- The focus here is on decarbonization, ESG pressures, tighter regulation and tougher competition, all feeding into a flatter revenue path and more pressure on pricing over time.
- Assumptions include earnings of US$2.4b by about 2029, profit margins at 11.1% and a lower P/E of 11.1x, with the view that the market may not be willing to pay as much for those earnings in the future.
- This narrative still acknowledges Halliburton's technology and international exposure, but treats them as insufficient to offset sector headwinds if demand and capital flows to oil and gas weaken further.
Taken together, these narratives give you a clear range, from about US$28 to US$46, tied to explicit assumptions on revenue, margins, valuation multiples and risk. The key step is deciding which storyline is closer to how you see Halliburton's future cash flows and what you think is a reasonable P/E for that profile, then testing the current price against your chosen view.
Once you have a sense of which version of the story fits your expectations, you can use the full Community Narratives and valuation tools to pressure test your assumptions, compare alternative fair values and see how new earnings or newsflow shift the picture over time.
Do you think there's more to the story for Halliburton? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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