Halliburton stock rating initiated at Buy by Rothschild Redburn

Rothschild Redburn initiated coverage on Halliburton (NYSE:HAL) with a Buy rating and a $35 price target, implying a 36% potential return, despite recent 19-25% reductions in 2025-26 earnings estimates due to U.S. shale activity slowdown. The firm anticipates a meaningful EBITDA recovery by 2027, with estimates 6% above consensus, and projects the company's EV/EBITDA to decrease to 5.6x by 2028, significantly below its long-run average. This positive outlook is reinforced by recent analyst upgrades and target increases from RBC Capital, Stifel, and Evercore ISI, alongside Halliburton's strategic agreements with Shell and VoltaGrid, signaling operational strength and future growth opportunities.

Analysis

Rothschild Redburn initiated coverage on Halliburton (NYSE:HAL) with a Buy rating and a $35 price target, implying a potential 36% total shareholder return over the next 12 months from its current $26.84. This positive outlook emerges despite a 19-25% year-to-date reduction in 2025-26 earnings estimates, primarily attributed to a slowdown in U.S. shale activity. The firm notes Halliburton's healthy financial position, with liquid assets exceeding short-term obligations.

Rothschild Redburn anticipates limited further downgrades for 2026 and projects a meaningful EBITDA recovery by 2027, with their estimates approximately 6% above consensus. Their analysis indicates Halliburton's EV/EBITDA ratio is expected to decrease from 7.1x in 2025 to 5.6x by 2028, positioning it 26% below its long-run average, suggesting an attractive valuation derived from discounted cash flow analysis.

This bullish sentiment is reinforced by recent analyst actions, including RBC Capital's upgrade to Outperform ($31 target) and Stifel's increased target to $32, both citing strong Q3 performance and optimistic guidance. Evercore ISI also maintained an Outperform rating with a $28 target, highlighting the company's resilience in cost controls. Furthermore, strategic agreements with Shell for ROCS technology and VoltaGrid for international data center solutions underscore Halliburton's operational strength and potential for diversification.

These developments, coupled with a 32.38% price return over the past six months, suggest a company navigating near-term challenges while positioning for future growth through operational efficiency and strategic partnerships.

Key Decisions for Investors

• Consider a long position in Halliburton, given the strong analyst consensus for a significant EBITDA recovery by 2027 and an attractive projected EV/EBITDA valuation relative to its long-run average.
• Monitor U.S. shale activity trends closely, as any further deceleration or acceleration will directly impact near-term earnings estimates for 2025-26.
• Evaluate the long-term impact of Halliburton's strategic partnerships and technology advancements, such as the Shell and VoltaGrid agreements, as potential drivers for sustained growth beyond traditional oilfield services.