Is It Too Late To Consider Halliburton (HAL) After Its 101% One-Year Rally?

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If you are wondering whether Halliburton at around US$41.70 still offers value after a strong run, the key is understanding what the current price actually reflects.

The stock has returned 10.9% over the past month, 40.9% year to date, and 101.0% over the last year, which naturally raises questions about how much of the story is already priced in.

Recent coverage has focused on Halliburton as a major US energy services company and how its scale and global footprint position it within the sector. This context has kept attention on how sensitive the stock might be to changing sentiment around energy spending and capital allocation.

On Simply Wall St's 6 point valuation framework, Halliburton scores a 4/6. Next you will see how different valuation methods line up with that score, followed by a more holistic way to think about what the stock is really worth.

Halliburton delivered 101.0% returns over the last year. See how this stacks up to the rest of the Energy Services industry.

A Discounted Cash Flow model takes projected future cash flows, then discounts them back to today using a required return. The result is an estimate of what the entire company, and by extension each share, could be worth based on those cash flows.

For Halliburton, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $1.52b. Analysts provide detailed forecasts out to 2030, with Simply Wall St extrapolating beyond the explicit analyst window. For example, projected free cash flow in 2030 is $2.76b, and the ten year path between 2026 and 2035 is set out as a series of annual estimates in the model.

Discounting all those projected cash flows back to today produces an estimated intrinsic value of $63.60 per share. Compared with a current share price of about $41.70, the model implies Halliburton is trading at a 34.4% discount to this DCF value.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Halliburton is undervalued by 34.4%. Track this in your watchlist or portfolio, or discover 45 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Halliburton.

For a profitable company like Halliburton, the P/E ratio is a straightforward way to think about what you are paying for each dollar of earnings. It gives a quick sense of how the market values those earnings compared with other stocks.

What counts as a "normal" or "fair" P/E usually reflects expectations for future growth and the level of risk investors see. Higher expected growth or lower perceived risk can support a higher multiple, while slower expected growth or higher risk can justify a lower one.

Halliburton currently trades on a P/E of 22.6x. That sits below the Energy Services industry average P/E of 35.5x and is very close to the peer average of 22.4x. Simply Wall St’s proprietary Fair Ratio for Halliburton is 25.0x, which is the P/E that would typically be expected given its earnings profile, industry, profit margins, market cap and risk factors.

The Fair Ratio is more tailored than a simple comparison with peers or sector averages because it adjusts for company specific characteristics instead of assuming every business should trade on the same multiple.

Comparing the current 22.6x P/E with the 25.0x Fair Ratio suggests Halliburton trades at a discount to this Fair Ratio based view.

Result: UNDERVALUED

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Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, a simple way for you to attach a clear story about Halliburton to the numbers you believe in, link that story to a financial forecast, and then see a Fair Value that you can compare directly with today’s price.

On Simply Wall St’s Community page, Narratives let you set your own view on future revenue, earnings and margins. These are then instantly translated into a Fair Value that updates automatically when new news or earnings arrive, so your decision framework does not stay static while the world moves.

For Halliburton, one investor might align with a more bullish Narrative that supports a Fair Value around US$46.03. Another might prefer a cautious Narrative closer to US$28.17. By comparing each Fair Value with the current share price you can decide whether you see the stock as offering enough upside or looking fully priced for your chosen story.

For Halliburton however, we will make it really easy for you with previews of two leading Halliburton Narratives:

🐂 Halliburton Bull Case

Fair Value: US$46.03

Implied discount to this Narrative: 9.4% compared with the recent US$41.70 share price

Revenue growth assumption: 5.17% a year

Views Halliburton as a beneficiary of wider use of automation, digital tools, and international artificial lift, with those areas feeding into higher margins and more recurring revenue.

Assumes earnings reach about US$2.9b by 2029, with profit margins rising to 11.4% and the stock trading on a P/E of 15.1x, which is below the current US Energy Services industry P/E of 26.0x.

Flags risks from decarbonization trends, pricing pressure, regulation, and competition, which could limit revenue, margins, or market share if Halliburton does not adjust successfully.

🐻 Halliburton Bear Case

Fair Value: US$28.17

Implied premium to this Narrative: 48.0% compared with the recent US$41.70 share price

Revenue growth assumption: 34.49% annual decline

Focuses on decarbonization, ESG driven capital shifts, regulation, and intense competition as forces that could reduce Halliburton's project pipeline and keep revenue under pressure.

Assumes earnings reach about US$2.4b by 2029 with margins at 11.1%, but requires a lower future P/E of 11.1x, beneath the current US Energy Services industry P/E of 27.1x.

Highlights that if oil demand, rig counts, or pricing weaken further than consensus expects, Halliburton's current share price could sit well above what these more cautious earnings and multiple assumptions support.

These two Narratives bracket the range of views currently visible in the market and give you a clear starting point to test your own expectations against the numbers.

When you are ready to build your own version or see the full narrative context for Halliburton, you can step through the Community Narratives and decide which assumptions line up with how you see the company.

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Halliburton on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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.

Companies discussed in this article include HAL.

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