CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target of $46, up $4, reflects an 8.7x multiple of EV to projected 2024 EBITDA, slightly above HAL’s historical average. We raise our 2023 EPS estimate by $0.05 to $3.07 and cut 2024’s by $0.09 to $3.47. Q3 EPS of $0.79 vs. $0.60, beat consensus by $0.02. Q3 revenues ($5.8B) rose 8% Y/Y, driven by HAL’s international segment (+17%). Amongst the “Big 3” services firms (HAL, SLB, and BKR), HAL holds the largest North American (NA) exposure (45% of 2022 revenues) vs. its peer average (22% of 2022 revenues). The EIA forecasts WTI pricing to average ~$80/b in 2023 (vs. $95/b in 2022) and $91/b in 2024. Given that drilled but uncompleted well count (DUCs) have dropped ~47% since Q1 2020 as E&Ps turned to their DUCs for production vs. drilling new wells, we think that HAL should benefit in the long run in NA activity as E&Ps are slowly putting themselves between a rock and a hard place. We see HAL with free cash flow in the range of $ $1.8B (vs. $1.4B in 2022) and $2.2B in 2024. Shares yield 1.6%.