Uncertain Macroeconomic Environment A Headwind For Halliburton Stock

Uncertain Macroeconomic Environment A Headwind For Halliburton Stock

Despite OPEC easing production cuts in the coming months, oil field service firms including Halliburton (NYSE: HAL) are likely to observe slow top line recovery due to an uncertain macroeconomic environment as upstream companies remain committed to cash preservation and capex curtailment measures. Moreover, the company's cash conservation policy limits economic returns, leaving investors to bet on rig count numbers to realize capital gains. We highlight Halliburton's stock performance with its peers and broader markets in an interactive dashboard analysis, Halliburton Stock Return. The shares of Halliburton (NYSE: HAL) have reached pre-Covid levels in recent weeks assisted by higher benchmark prices and recovering demand. Along with a 35% contraction in the top line, the company's net property, plant and equipment declined by 41% last year – reporting $3. 8 billion of impairment and other charges. Despite a quick jump in benchmark prices, U. S. rig count numbers remain 43% below pre-Covid levels. Moreover, the EIA expects a slow improvement in rig count figures as benchmark prices are likely to observe a correction next year. Given the company's ongoing capital preservation measures including capex cut and trimmed dividend (leading to lower dividend yield), Trefis believes that HAL stock is overvalued. We