Oil price shock and Halliburton’s move

Crude oil prices jumped after escalating conflict risks in the Middle East and concerns around supply routes near Iran. Halliburton (HAL) reacted alongside other oilfield services stocks as investors reassessed exposure to energy related earnings.

At a latest share price of US$34.73, Halliburton’s recent move on the oil price shock comes after a 7 day share price return of 3.24% but a 90 day share price return that declined 19.20%. The 1 year total shareholder return of 66.60% contrasts with a 3 year total shareholder return that declined 4.71% and a 5 year total shareholder return of 98.85%. This pattern suggests strong long term gains but fading shorter term momentum as investors reassess risk around energy demand and project activity.

If you are looking beyond Halliburton for other energy related ideas, this could be a useful moment to check out 40 power grid technology and infrastructure stocks

Halliburton’s share price has swung between strong 1 year gains and weaker recent returns, all against a backdrop of higher oil prices and conflict risk. At today’s valuation, investors may be weighing whether that mix offers sufficient potential reward to justify the level of exposure.

Most Popular Narrative: 21.5% Undervalued

Halliburton’s most followed narrative points to a fair value of $44.24 compared with the last close at $34.73, which frames the recent oil driven move against a wider earnings and project pipeline story.

The company's ongoing international diversification, growing faster in regions like Latin America, Africa, and the Middle East, and leveraging U.S.-style unconventional expertise, creates a larger, more stable revenue base and reduces earnings cyclicality, supporting both top-line growth and improved earnings predictability.

Want to see how this global build out feeds into the $44.24 fair value? The crucial levers are projected earnings growth, margin expansion, and the future profit multiple.

Result: Fair Value of $44.24 (UNDERVALUED)

However, the Halliburton narrative still faces real tests if decarbonization policies tighten faster than expected or if North American shale activity weakens for a longer period.

Next Steps

Given the mix of optimism and concern around Halliburton, this is a good moment to look through the data yourself and decide how the risks and rewards balance out for your portfolio. To see both sides set out in one place, review the 4 key rewards and 2 important warning signs

Looking for more investment ideas beyond Halliburton?

If Halliburton has sharpened your interest in energy and infrastructure, this may be a good moment to widen your watchlist and explore additional ideas.

• Look for potential value opportunities by checking stocks that currently appear mispriced on fundamentals through the 53 high quality undervalued stocks.
• Review companies that feature in the 10 dividend fortresses if you are focusing on higher yielding, resilient dividend payouts.
• Scan companies with stronger balance sheets using the 80 resilient stocks with low risk scores to see which businesses may be better positioned to handle future shocks.

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.