Halliburton (HAL) Management Expects Tough 2016 - Oppenheimer Cuts PT to $40

Oppenheimer maintained an Outperform rating on Halliburton (NYSE: HAL), and cut the price target to $40.00 (from $48.00), following the company's 4Q earnings report. Management reiterated several times that 2016 will be a “tough slog.” Oppenheimer expects 2016 to mark the trough of the cycle. It is still unclear when a more precise bottom will occur, given the different regional dynamics and continued oversupply of the oil markets.

Analyst James Schumm commented, "Halliburton was able to hold 4Q15 EPS flat sequentially despite significant declines in the rig count and service pricing. It eliminated 25% of its workforce in 2015 and consolidated several facilities. Though North America fell victim to the brutal market, international margins actually increased 220 bps in 2015. That said, management reiterated several times that 2016 will be a “tough slog.” We expect 2016 to mark the trough of the cycle but it is still unclear when a more precise bottom will occur given the different regional dynamics and continued oversupply of the oil markets. However, we believe that Halliburton will generate $1.5B in free cash flow this year and gain market share along with Schlumberger while weaker players strain their equipment and balance sheets."

For an analyst ratings summary and ratings history on Halliburton click here. For more ratings news on Halliburton click here.

Shares of Halliburton closed at $29.28 yesterday.

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