HAL
Halliburton Company
$41.47
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 58.5% above fair value
You pay
$41.47
Bear
$11.65
Fair
$26.17
Bull
$44.45
Bear
$11.65
-71.9%
FCF $1296M × 10x
Fair
$26.17
-36.9%
FCF $1672M × 13x
Bull
$44.45
+7.2%
FCF $2048M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
24.3x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $39.64 from 64 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $26.17 per share.
Warnings
If oil drops to $60/barrel, the stock could fall -80%. Check whether the company can survive at low prices and still pay its dividend.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $39.64 (from 64 analysts). Our estimate is 52% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential