Goldman Sachs: Haliburton Still Best In Class

Haliburton HAL reported adjusted 3Q10 EPS of $0.58 vs. Goldman's estimate of $0.59 and consensus of $0.55. Pressure pumping driven N.A. results surprised to the upside while international operating income was 7% below expectations. Goldman adjusted its 2010-2012 EPS estimates by -2%/0%/-1% to $2.01/ $2.75/ $3.07 due to stronger N.A. and weaker international. Our 6-month, EBITDA based target of $40 is unchanged. In Goldman's opinion high expectations led to HAL selling off, but results were strong enough for it to keep the 9% above consensus EPS estimate unchanged for 2011. HAL's track record for execution has been the gold standard over the past few years and it expects HAL to generate the highest returns among peers over the next few years. Risks to achieving the target price include Pace of rig count, pricing, capacity additions, commodity prices. HAL is trading almost 3% lower at $33.04