HAL: Future Returns Will Hinge On Power Generation And Data Center Opportunities

Analysts have nudged their price target on Halliburton modestly higher, lifting fair value by about $0.08 per share to roughly $30.38 as they factor in the recent earnings beat, a stronger 2026 outlook, and improving visibility on margins, capital efficiency, and data center related power generation opportunities.

Analyst Commentary

Recent research updates reflect a notably more constructive stance on Halliburton, with multiple firms lifting ratings and targets after the Q3 print and 2026 guidance update.

Bullish Takeaways

• Bullish analysts highlight the latest earnings beat and raised 2026 projections as evidence that Halliburton is executing ahead of expectations, supporting higher valuation multiples.
• Several price target increases, into the mid to high 20s and low 30s, are tied to improving capital efficiency and a returns focused management approach, which are expected to enhance free cash flow generation.
• Stronger than anticipated Q3 margin performance is seen as validating the company’s cost discipline and pricing power, underpinning confidence in sustained profitability expansion.
• Exposure to onsite and data center related power generation, including the stake in VoltaGrid, is viewed as an underappreciated growth vector that could provide incremental upside to both earnings and the stock’s valuation framework.

Bearish Takeaways

• Bearish analysts maintain a more cautious stance, keeping neutral ratings even after the earnings beat, suggesting that much of the near term improvement may already be reflected in the share price.
• Some see limited upside from current levels given the stock’s historical volatility and the risk that international power generation and data center opportunities develop more slowly than bulls expect.
• There is lingering concern that consensus estimates, though reset lower over the past year, could still prove optimistic if macro or upstream spending trends weaken, constraining multiple expansion.
• Uncertainty around the timing and scale of power generation contracts introduces execution risk, which could pressure valuation if project ramps or margins fall short of current expectations.

What's in the News

• The Trump administration is drafting a plan to resume offshore oil drilling along California's coast from 2027 to 2030, potentially boosting offshore activity for oilfield services providers including Halliburton (Washington Post).
• Halliburton signed a framework agreement with Shell to provide umbilical-less tubing hanger installation and retrieval services using ROCS technology, following successful deepwater trials and setting a global depth benchmark at 8,458 ft.
• In collaboration with Aker BP, Halliburton completed the first operation using the Enhanced Remote Operated Control System and Optime Tubing Hanger Orientation System on the Norwegian continental shelf, advancing digital, umbilical-less subsea controls.
• Petrobras awarded Halliburton multiple deepwater contracts in Brazil, including SmartWell intelligent completions, EcoStar electric tubing retrievable safety valves, and vessel stimulation services, with work expected to begin in 2026.
• From July 1 to September 30, 2025, Halliburton repurchased 11.3 million shares for about $249.8 million, bringing total buybacks since 2006 to 315.8 million shares, or roughly one third of shares outstanding under the program.

Valuation Changes

• Fair Value has risen slightly, increasing by about $0.08 per share to approximately $30.38.
• Discount Rate has fallen marginally, moving from about 7.70% to roughly 7.65%, reflecting a modestly lower perceived risk profile.
• Revenue Growth has ticked up slightly, with the long term assumption moving from about 1.59% to roughly 1.60%.
• Net Profit Margin is essentially unchanged, edging down only fractionally from about 9.81% to roughly 9.81% on updated modeling.
• Future P/E has risen slightly, with the forward multiple increasing from about 12.73x to roughly 12.75x, implying a modestly higher valuation on projected earnings.