Halliburton's 3Q15 Earnings: Possible Pressure from US Rig Count
(Continued from Prior Part)
Wall Street’s forecasts for Halliburton
In this series, we’ve seen Halliburton’s (HAL) stock reacted negatively following its latest quarter earnings release. Now let’s look at Wall Street analysts’ forecasts for Halliburton shares following its 3Q15 earnings release.
Consensus rating for Halliburton
Approximately 75% of analysts tracking Halliburton (HAL) rate it a “buy” or some equivalent. Approximately 25% rate the company a “hold” or an equivalent, while none of the analysts recommend a “sell.”
In comparison, approximately 73% of analysts tracking Baker Hughes (BHI) rate it a “buy” or some equivalent, approximately 23% have rated it as “hold,” while the rest rate it as “sell.” In November 2014, Halliburton and Baker Hughes reached an agreement in which BHI is expected to be merged with HAL by either 4Q15 or in 2016. Baker Hughes constitutes 2.3% of the Energy Select Sector SPDR ETF (XLE).
Analysts’ recommendations
When it comes to individual recommendations, Scotia Howard Weil and Capital One Securities, two independent research firms, give Halliburton a target price of $45 and $44, respectively. Halliburton currently trades near $37, implying a 20% and 18% return, respectively, for the next 12 months.
RBC Capital Markets, a Canadian investment bank and part of the Royal Bank of Canada, gives Halliburton a target price of $48. This is one of the highest target prices for HAL. This implies a 28.5% return over a one-year period at the current price. Robert W. Baird & Co., another independent financial services firm, gave Halliburton a target price of $38, one of its lowest target prices. At the current market price, this implies 2% return over the next year.
Barclays (BRC), an investment bank, gave Halliburton a one-year target price of $47, which implies a 26% return over the next 12 months.
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