We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Sell Halliburton (HAL) Right Away
Read MoreHide Full Article
Halliburton Company (HAL - Free Report) has lost 32.5% in the past year and the struggle is likely to continue as crude volatility has created an uncertainty for oilfield service businesses.
The one-year pricing chart shows that Halliburton has underperformed the Zacks Oil & Gas Field Services industry, which has lost around 14.4%. Moreover, the Zacks Consensus Estimate for 2019 earnings per share has been revised downward to $1.47 from $1.87 over the past 30 days.
Following negative earnings estimate revision, the Houston, TX-based company currently carries a Zacks Rank #5 (Strong Sell).
Factors Dragging the Stock Down
Despite posting higher-than-expected results in the fourth quarter, Halliburton’s quarterly earnings per share and revenues fell year over year. This was owing to the slowdown in the North American completion services demand that led to pricing pressure in the hydraulic fracturing business. In other words, the pipeline bottleneck problem in the prolific U.S. shale plays and the plunging crude prices through the December quarter of 2018 lowered demand for oilfield services, affecting Halliburton’s year-over-year results.
There are major headwinds confronting Halliburton as volatility in oil prices will continue to affect the energy market through first-half 2019. The company expects crude volatility to affect its customers’ budget as well.
Halliburton added that many of its customers fixed their 2018 capital budget by assuming oil at $50 per barrel. Hence, considering the current commodity pricing scenario, the customers’ capital spending through 2019 is likely to remain flat, believes Halliburton. The oilfield service giant also said that its customers, with constrained reach to the capital market, may lower capital budget in 2019 if crude volatility persists.
Hence, conservative capital spending by explorers and producers can keep oilfield service demand weak in 2019. Thus 2019 is unlikely to be an outstanding year for oilfield service giants like Schlumberger Limited (SLB - Free Report) , Halliburton and Baker Hughes, a GE company .
Sunoco LP has average positive earnings surprise of 18.4% for the trailing four quarters.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
Image: Bigstock
Here's Why You Should Sell Halliburton (HAL) Right Away
Halliburton Company (HAL - Free Report) has lost 32.5% in the past year and the struggle is likely to continue as crude volatility has created an uncertainty for oilfield service businesses.
The one-year pricing chart shows that Halliburton has underperformed the Zacks Oil & Gas Field Services industry, which has lost around 14.4%. Moreover, the Zacks Consensus Estimate for 2019 earnings per share has been revised downward to $1.47 from $1.87 over the past 30 days.
Following negative earnings estimate revision, the Houston, TX-based company currently carries a Zacks Rank #5 (Strong Sell).
Factors Dragging the Stock Down
Despite posting higher-than-expected results in the fourth quarter, Halliburton’s quarterly earnings per share and revenues fell year over year. This was owing to the slowdown in the North American completion services demand that led to pricing pressure in the hydraulic fracturing business. In other words, the pipeline bottleneck problem in the prolific U.S. shale plays and the plunging crude prices through the December quarter of 2018 lowered demand for oilfield services, affecting Halliburton’s year-over-year results.
There are major headwinds confronting Halliburton as volatility in oil prices will continue to affect the energy market through first-half 2019. The company expects crude volatility to affect its customers’ budget as well.
Halliburton added that many of its customers fixed their 2018 capital budget by assuming oil at $50 per barrel. Hence, considering the current commodity pricing scenario, the customers’ capital spending through 2019 is likely to remain flat, believes Halliburton. The oilfield service giant also said that its customers, with constrained reach to the capital market, may lower capital budget in 2019 if crude volatility persists.
Hence, conservative capital spending by explorers and producers can keep oilfield service demand weak in 2019. Thus 2019 is unlikely to be an outstanding year for oilfield service giants like Schlumberger Limited (SLB - Free Report) , Halliburton and Baker Hughes, a GE company .
Stocks to Consider
Not all the stocks in the energy space are having a tough time. Investors can choose an energy stock like Sunoco LP (SUN - Free Report) , with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco LP has average positive earnings surprise of 18.4% for the trailing four quarters.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>