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Time to Buy Halliburton and BP Stock After Earnings?
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There are many quality investment options among the broader Zacks Oils & Energy sector and two companies that stand out for their attractive stock price and valuation are BP ((BP - Free Report) ) and Halliburton (HAL - Free Report) ).
Let’s see if it’s time to buy these attractively valued Oils & Energy companies following their Q4 reports.
BP Q4 Review
BP reported its fourth-quarter earnings on Tuesday with investors applauding the company for announcing a more conscious effort to focus on oil production rather than alternative energy during the quarterly release which caused BP shares to spike.
The announcement comes at a crucial time with crude oil prices remaining high and many analysts see the possibility of $100 a barrel by the summer. The increased concentration on oil production and less expansion into renewable energy could help BP strengthen its bottom line, as the company reported Q4 earnings of $1.59 per share missing estimates by -3.64% despite beating top-line expectations by 18.24% with sales at $70.35 billion.
Still, BP recorded a record year in profitability in fiscal year 2022 at $27.7 billion topping its previous high of $26.3 billion in 2008 and doubling last year’s profits of $12.8 billion.
Image Source: Zacks Investment Research
Halliburton Q4 Review
Pivoting to Halliburton, the oilfield service provider reported its Q4 earnings a few weeks ago on January 24, and was able to beat top and bottom line expectations. Halliburton posted fourth-quarter earnings of $0.72 per share topping estimates by 7.46% with sales at $5.58 billion registering a 2.57% surprise.
Halliburton also wrapped up a standout year, with its total revenue coming in at $20.3 billion, increasing 33% year over year, and operating income increasing 50% YoY to $2.7 billion.
Image Source: Zacks Investment Research
Performance & Valuation
Over the last year, Halliburton stock is up +19% Vs. BP’s +16% with both largely outperforming the S&P 500’s -10%. More impressive, since the rebound in oil prices over the last three years, Halliburton’s total return is a stellar +93% when including dividends to also top the benchmark and BP’s +28%.
Image Source: Zacks Investment Research
With higher crude oil prices continuing to support the growth of many companies in the broader Oils & Energy sector investors will still want to monitor the valuation of these equities
To that note, BP and Halliburton stocks do remain attractive. Trading at $38 per share, BP stock trades at just 5.6X. This is well below its decade-long high of 175.4X and a 55% discount to the median of 12.6X.
Similarly, Halliburton stock also trades around $38 per share at 12.6X forward earnings. Shares of HAL trade well below its extreme decade-high of 256X and 34% beneath the median of 19.2X.
EPS Growth & Outlook
After rounding out fiscal 2022, BP’s FY23 earnings are expected to drop -23% to $6.71 per share after a very exceptional year. Fiscal 2024 earnings are projected to dip another -5% but earnings estimate revisions have gone up.
On the top line, sales are forecasted to be virtually flat in FY23 but rise 3% in FY24 to $255.94 billion. It is important to note that Fiscal 2024 sales would still be -9% below pre-pandemic levels with 2019 sales at $282.61 billion.
Image Source: Zacks Investment Research
Turning to Halliburton, earnings are forecasted to climb 43% in FY23 and jump another 21% in FY24 to $3.74 per share. Earnings estimates have remained much higher over the last quarter but have slightly trended down in the last week following Halliburton’s Q4 report.
Halliburton’s sales are projected to rise 16% in FY23 and rise another 11% in FY24 to $26.14 billion. More impressive, fiscal 2024 sales would represent 16% growth from pre-pandemic levels with 2019 sales at $22.40 billion.
Image Source: Zacks Investment Research
Dividends
After a record year in profitability, BP recently announced another $2.75 billion in buybacks and raised its dividend by 10% following suit with other Oil and Energy companies. To that note, Halliburton increased its dividend by 33% after its strong Q4 report in January.
BP’s dividend trumps Halliburton’s yield and the S&P 500’s average of 1.40% but is still below the Oils & Energy sectors’ 4.43%.
Image Source: Zacks Investment Research
Bottom Line
BP and Halliburton remain attractive at their current levels, with HAL especially standing out for its stellar top and bottom-line growth outlook. Halliburton stock currently sports a Zacks Rank #2 (Buy) with BP landing a Zacks Rank #3 (Hold), but the company’s increased concentration on oil production could continue to increase its growth prospects as well.
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Time to Buy Halliburton and BP Stock After Earnings?
There are many quality investment options among the broader Zacks Oils & Energy sector and two companies that stand out for their attractive stock price and valuation are BP ((BP - Free Report) ) and Halliburton (HAL - Free Report) ).
Let’s see if it’s time to buy these attractively valued Oils & Energy companies following their Q4 reports.
BP Q4 Review
BP reported its fourth-quarter earnings on Tuesday with investors applauding the company for announcing a more conscious effort to focus on oil production rather than alternative energy during the quarterly release which caused BP shares to spike.
The announcement comes at a crucial time with crude oil prices remaining high and many analysts see the possibility of $100 a barrel by the summer. The increased concentration on oil production and less expansion into renewable energy could help BP strengthen its bottom line, as the company reported Q4 earnings of $1.59 per share missing estimates by -3.64% despite beating top-line expectations by 18.24% with sales at $70.35 billion.
Still, BP recorded a record year in profitability in fiscal year 2022 at $27.7 billion topping its previous high of $26.3 billion in 2008 and doubling last year’s profits of $12.8 billion.
Image Source: Zacks Investment Research
Halliburton Q4 Review
Pivoting to Halliburton, the oilfield service provider reported its Q4 earnings a few weeks ago on January 24, and was able to beat top and bottom line expectations. Halliburton posted fourth-quarter earnings of $0.72 per share topping estimates by 7.46% with sales at $5.58 billion registering a 2.57% surprise.
Halliburton also wrapped up a standout year, with its total revenue coming in at $20.3 billion, increasing 33% year over year, and operating income increasing 50% YoY to $2.7 billion.
Image Source: Zacks Investment Research
Performance & Valuation
Over the last year, Halliburton stock is up +19% Vs. BP’s +16% with both largely outperforming the S&P 500’s -10%. More impressive, since the rebound in oil prices over the last three years, Halliburton’s total return is a stellar +93% when including dividends to also top the benchmark and BP’s +28%.
Image Source: Zacks Investment Research
With higher crude oil prices continuing to support the growth of many companies in the broader Oils & Energy sector investors will still want to monitor the valuation of these equities
To that note, BP and Halliburton stocks do remain attractive. Trading at $38 per share, BP stock trades at just 5.6X. This is well below its decade-long high of 175.4X and a 55% discount to the median of 12.6X.
Similarly, Halliburton stock also trades around $38 per share at 12.6X forward earnings. Shares of HAL trade well below its extreme decade-high of 256X and 34% beneath the median of 19.2X.
EPS Growth & Outlook
After rounding out fiscal 2022, BP’s FY23 earnings are expected to drop -23% to $6.71 per share after a very exceptional year. Fiscal 2024 earnings are projected to dip another -5% but earnings estimate revisions have gone up.
On the top line, sales are forecasted to be virtually flat in FY23 but rise 3% in FY24 to $255.94 billion. It is important to note that Fiscal 2024 sales would still be -9% below pre-pandemic levels with 2019 sales at $282.61 billion.
Image Source: Zacks Investment Research
Turning to Halliburton, earnings are forecasted to climb 43% in FY23 and jump another 21% in FY24 to $3.74 per share. Earnings estimates have remained much higher over the last quarter but have slightly trended down in the last week following Halliburton’s Q4 report.
Halliburton’s sales are projected to rise 16% in FY23 and rise another 11% in FY24 to $26.14 billion. More impressive, fiscal 2024 sales would represent 16% growth from pre-pandemic levels with 2019 sales at $22.40 billion.
Image Source: Zacks Investment Research
Dividends
After a record year in profitability, BP recently announced another $2.75 billion in buybacks and raised its dividend by 10% following suit with other Oil and Energy companies. To that note, Halliburton increased its dividend by 33% after its strong Q4 report in January.
BP’s dividend trumps Halliburton’s yield and the S&P 500’s average of 1.40% but is still below the Oils & Energy sectors’ 4.43%.
Image Source: Zacks Investment Research
Bottom Line
BP and Halliburton remain attractive at their current levels, with HAL especially standing out for its stellar top and bottom-line growth outlook. Halliburton stock currently sports a Zacks Rank #2 (Buy) with BP landing a Zacks Rank #3 (Hold), but the company’s increased concentration on oil production could continue to increase its growth prospects as well.