• Wondering whether Halliburton at around US$39.60 still offers value, or if most of the opportunity is already in the price? This article walks through what the current valuation signals actually say.
• The stock is up 1.1% over the past week but down 5.2% over the past month, while the year to date return sits at 33.8% and the 1 year return at 74.7%. This naturally raises questions about how much of the story is already priced in.
• Recent coverage has focused on Halliburton as a key player in the energy services sector and on how investor sentiment around energy spending and capital discipline is influencing trading activity in the stock. Together, these themes help frame why the share price has moved over shorter and longer time frames and why valuation has become a central talking point.
• Halliburton currently scores a 5/6 valuation check score, which points to several areas where the stock may screen as undervalued. The rest of this article will walk through the main valuation methods used to assess that, while hinting at a more rounded way to think about value at the end.

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 cash the company may generate in the future and discounting those cash flows back to today using a required return.

For Halliburton, the 2 Stage Free Cash Flow to Equity model starts with last twelve months free cash flow of about $1.52b. Analyst and extrapolated projections suggest free cash flow reaching about $2.76b by 2030, with a series of yearly estimates between 2026 and 2035 that are discounted back to today using Simply Wall St's methodology and assumptions.

Bringing all those discounted cash flows together leads to an estimated intrinsic value of about $65.48 per share. Compared with a recent share price around $39.60, the model implies Halliburton trades at roughly a 39.5% discount to this DCF estimate. On this basis, the stock screens as undervalued according to the model used.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Halliburton is undervalued by 39.5%. Track this in your watchlist or portfolio, or discover 44 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 the stock with the earnings it is currently generating. It helps you see how many dollars of price the market is assigning to each dollar of earnings.

What counts as a "normal" or "fair" P/E depends on how investors see the company’s growth potential and risk profile. Higher expected growth or lower perceived risk can support a higher P/E, while lower growth expectations or higher risk usually point to a lower P/E.

Halliburton currently trades on a P/E of 21.48x. That sits slightly below the Energy Services industry average P/E of 28.24x and close to the peer average of 21.79x. Simply Wall St’s Fair Ratio for Halliburton is 22.58x, which is its proprietary view of what the P/E might be given factors such as earnings growth, industry, profit margin, market cap and company specific risks.

This Fair Ratio is more tailored than a simple comparison with peers or the broad industry because it adjusts for company specific characteristics rather than relying on averages alone. With the Fair Ratio at 22.58x and the actual P/E at 21.48x, the stock screens as slightly undervalued on this measure.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.

Upgrade Your Decision Making: Choose your Halliburton Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives are Simply Wall St’s way for you to attach a clear story to your numbers by linking what you believe about Halliburton’s future revenue, earnings and margins to a forecast and then to a fair value that you can compare with today’s share price.

On the Community page, Narratives are available as an easy tool used by millions of investors. You can see different fair values side by side, such as a more optimistic Halliburton view that lines up with a bullish fair value around US$46.03 and a more cautious view closer to US$28.17. You can then decide for yourself whether the current price near the low US$40s feels high or low against the story you find more reasonable.

Because Narratives update automatically when new earnings, news or analyst targets such as the US$55 high and US$31 low come in, your Halliburton view does not stay static. It evolves with fresh information while keeping the link between story, forecast and fair value clear and repeatable for your own decision making.

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

Start with the optimistic view, then contrast it with the more cautious one, and see which story lines up better with how you think cash flows, regulation and energy demand could shape the business over time.

Fair value in this narrative: US$43.68 per share

Implied discount or premium to fair value: trades at about a 9.3% discount to this narrative fair value based on the recent US$39.60 share price

Revenue growth assumption: 3.61% a year

• Focuses on technology such as digital and automation tools, plus international expansion to support margins and more recurring, service-heavy revenue.
• Assumes steady global energy demand and the role of natural gas help underpin activity across key regions even when some markets soften.
• Analyst consensus fair value of US$43.68 is tied to expectations for higher earnings and margins over time, with the stock trading below that level at recent prices.

Fair value in this narrative: US$28.17 per share

Implied discount or premium to fair value: trades at about a 40.6% premium to this narrative fair value based on the recent US$39.60 share price

Revenue growth assumption: revenue is modeled to decline by about 0.34% a year in this scenario

• Emphasizes risks from decarbonization policies, ESG-driven capital shifts and regulation that could weigh on long-run project pipelines and revenue.
• Highlights reliance on certain regions, competition from local service providers and potential pricing pressure as sources of earnings volatility.
• Fair value of about US$28.17 sits well below the recent share price, reflecting a view that current expectations may be ahead of what these assumptions support.

Seeing both narratives side by side can help you decide which set of assumptions feels closer to your own expectations for energy demand, project activity and how Halliburton manages costs, technology and regulation over the long term.

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.