For investors considering whether Halliburton at around US$36 represents fair value or a potential bargain, this article walks through what the current price may be implying about the stock.
The share price has recently shown strong momentum, with returns of 2.5% over 7 days, 7.9% over 30 days, 21.6% year to date, 40.6% over 1 year, a 1.3% decline over 3 years, and 64.9% over 5 years, which can change how investors think about both upside and risk.
Recent coverage of Halliburton has focused on its position in the energy services sector and on how market sentiment around oil and gas activity is affecting interest in the stock. This context helps frame why recent price moves may not fully capture what the business could be worth under different scenarios.
On our checks, Halliburton has a valuation score of 3 out of 6. This means it screens as undervalued on half of the metrics we track. The sections ahead will walk through those methods, then finish with a broader way of thinking about valuation that goes beyond any single model.
A Discounted Cash Flow, or DCF, model takes estimates of a company’s future cash flows and discounts them back to today’s dollars, aiming to show what the business might be worth based on those cash flows rather than just the current share price.
For Halliburton, the model used is a 2 Stage Free Cash Flow to Equity approach. The company’s latest twelve month free cash flow is about $1.6b. Analysts provide explicit free cash flow estimates for the next few years, and Simply Wall St then extends those projections further, with estimated free cash flow reaching $2.85b in 2030. Intermediate annual projections between 2026 and 2035 range from roughly $1.90b to $3.82b, with each year discounted back to today using the model’s required return assumptions.
Adding these discounted cash flows together gives an estimated intrinsic value of about $77.52 per share. Compared with the current market price around $36, the model suggests Halliburton trades at roughly a 53.6% discount to this DCF estimate, which screens as undervalued on this method alone.
For profitable companies, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings, which often matters more to shareholders than revenue or assets on their own.
What counts as a “normal” P/E depends on how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk tend to line up with a lower multiple.
Halliburton currently trades on a P/E of 23.5x. That sits below the Energy Services industry average of about 26.6x and roughly in line with the peer average of 23.2x. Simply Wall St’s Fair Ratio for Halliburton is 22.9x, which is its proprietary view of what a reasonable P/E might be given factors like the company’s earnings growth profile, industry, profit margins, market cap and risk characteristics.
Compared with simple industry or peer checks, the Fair Ratio is designed to be more tailored to Halliburton because it explicitly weighs growth, risk and profitability alongside its sector and size. With the actual P/E of 23.5x only slightly above the Fair Ratio of 22.9x, the shares screen as about in line with this multiple based approach.
Earlier we mentioned that there is an even better way to think about valuation. On Simply Wall St you can use Narratives, where you set a story for Halliburton, link that story to assumptions for future revenue, earnings and margins, and see a fair value that you can compare with the current price. You can choose whether you align more with a cautious view closer to a US$20 fair value, a constructive view nearer US$44, or something around the consensus of roughly US$32. Each Narrative updates automatically as new news or earnings arrive, and all are available for you to explore on the Community page used by millions of investors.
For Halliburton however we’ll make it really easy for you with previews of two leading Halliburton Narratives:
🐂 Halliburton Bull Case
Fair value in this bullish narrative: US$43.78 per share
Implied discount to this fair value at US$36.00: about 17.8%
Revenue growth assumption used: 5.04% a year
The bullish view leans on growing demand for Halliburton’s technology and automation offerings, including data center power projects and international artificial lift. These are expected to support higher margins over time.
Analysts in this camp assume modest revenue growth, higher profit margins and ongoing buybacks, with the shares trading on a future P/E that sits below the current Energy Services industry average they reference.
This narrative assumes Halliburton continues to build earnings resilience through digital tools, clean energy related services and disciplined capital allocation, while acknowledging that decarbonization, pricing pressure and regulatory costs remain real risks.
🐻 Halliburton Bear Case
Fair value in this bearish narrative: US$28.33 per share
Implied premium to this fair value at US$36.00: about 27.1%
Revenue growth assumption used: 6.65% decline a year
The bearish view is built around concerns that decarbonization targets, ESG driven capital shifts and tighter regulation could weigh on project pipelines, margins and long term oil and gas activity for Halliburton and its customers.
Analysts behind this narrative factor in declining revenue, slightly lower margins and a more cautious future P/E, while also highlighting competitive and regional risks such as U.S. land softness and overcapacity.
At the same time, they recognise that technology leadership, international growth and cost discipline could challenge this thesis if those positives prove stronger than the headwinds they are focused on.
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.
