Halliburton can reach about $2.80 of 2027 earnings without a North America frac rebound. At twelve times that is a $34 stock, a market-like return from $33.67 including the dividend.
Key points
- $5.70 billion third-quarter revenue and $0.60 adjusted EPS met the print; fourth-quarter EPS is guided to $0.62, $0.64.
- 15% 2027 operating margin is management’s early view, with North America revenue assumed flat and no frac recovery required.
- $33.67 pays about 12 times my $2.80 of 2027 earnings, so the stock tracks the market.
The call
The price requires Halliburton to deliver mid-single-digit growth and about 15 percent operating margins next year. That is the company’s own framework, not a hidden rebound in U.S. fracturing.
I model slightly less: 4 percent revenue growth and 14.5 percent margins, or $2.80 of 2027 earnings. Twelve times that is $34. Savings from SAP and severance are real; a frac recovery would be extra, not the base.
Revenue and operating margin- Revenue ($ billions)
- Operating margin %
Company reports through Q2 2026; Q3–Q4 2026 and 2027 are my estimates from the Oct 20 call.
Valuation
| Item | Figure |
|---|
| 2026 revenue (run-rate) | $22.5 billion |
| 2027 revenue (my estimate) | $23.4 billion |
| 2027 operating margin (mine) | 14.5% |
| 2027 earnings per share | $2.80 |
| Multiple | 12 times |
| 12-month target | $34.00 |
Oilfield-service stocks in mid-cycle usually trade 11, 13 times forward earnings. Twelve times is the middle of that band. Upside is a frac rebound; downside is delayed international start-ups. The $0.68 dividend (2.0 percent) keeps the expected return near the market, so the rating is hold.
Quarterly revenue ($ billions)SEC XBRL through Q2 2026; Q3 actual and Q4 guidance from Oct 20 8-K.
Risks
- North America fracturing stays weak and crew transfers keep adding downtime; watch sequential Completion and Production margins.
- Middle East activity falls below second-half 2026; watch sequential Middle East/Asia revenue.
- Working capital stays tight; watch fourth-quarter free cash flow versus the $1.6 billion full-year guide.
What would change my mind
A 2027 outlook that drops operating margin below 14 percent, or a clear North America frac recovery that lifts 2027 earnings above $3.10.