Halliburton At A Disadvantage, Analyst Says: Schlumberger And Baker Hughes 'In Better Position'

Earlier this month, Halliburton Company HAL said that a cyberattack had disrupted its critical business applications.

A lower overall revenue diversification puts the company at a disadvantage against the backdrop of a tepid commodity macro, according to RBC Capital Markets.

Analyst Keith Mackey downgraded the rating for Halliburton from Outperform to Sector Perform, while slashing the price target from $44 to $37.

The Halliburton Thesis: While the company's revenue growth outpaced large cap OFS peers from 2021 to 2023, its revenues could lag by around 5% from 2024 to 2026, Mackey said in the downgrade note.

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"Lower growth is largely connected to HAL’s 42% revenue weighting to North America" versus the average of 23% of rivals Schlumberger NV SLB and Baker Hughes Co BKR, the analyst wrote. Global rig counts are "increasing at decreasing rates," which puts companies with greater geographic and business diversity in better position to outperform, he added.

While Halliburton has achieved margin expansion and lowered its capital intensity, "a potential upward inflection in E&P spending should be more evident in dedicated US providers," Mackey stated.

HAL Price Action: Shares of Halliburton had risen by 0.29% to $28.10 at the time of publication on Friday.

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