Halliburton (NYSE: HAL) is a good buy for many reasons, but several stand out for 2025, including improving market sentiment, cash flow, and capital return. This is a look at five of them and what they mean for the share price. The bottom line is that the oilfield services company is well-positioned for sustained, long-term growth despite falling oil prices.
That is because of the industry-wide push toward efficiency and greener operations and Halliburton’s position in AI. Halliburton is an AI innovator, creating and operating the first-of-its-kind AI tools for the oilfield. These tools help operators model operations, optimize exploration, improve drilling results, and produce profits.
1. Interest in Halliburton Grows, A Tailwind is Blowing
The first reason why Halliburton is a good buy in 2025 is that market interest is increasing. Signals from the increased analyst coverage to the spike in Q1 institutional buying and appearance on MarketBeat’s Most Followed stock list point to increased buying activity, total ownership, and a reduction in stock availability.
This is creating upward pressure in the market. Regarding the analysts, the number of ratings tracked by MarketBeat is up 53% YOY in April 2025, while institutional buying ramped to a multi-year high. These trends are expected to continue in 2025 and 2026 because of the cash flow, balance sheet, growth outlook, and capital return.
2. Halliburton’s Cash Flow Sustains Balance Sheet Health
Halliburton’s cash flow may not be robust compared to other technology stocks, but it is solid, sufficient to sustain the balance sheet health. It is also sufficient to sustain the capital return, which includes share repurchases and dividend distribution. The company is forecasting sales softness in 2025, but FCF will be ample even with a low single-digit contraction. The FCF margin in 2024 was nearly 11.35%, generating $2.6 billion in funds, with capital returns 60% of it. Balance sheet highlights include cash up and equal to 2024 FCF, current and total assets up, and total liabilities down. Liability is down on debt reduction, with long-term debt running at only 0.7X equity. Equity rose and is expected to increase again in 2025.
3- Halliburton’s Growth Outlook is Positive
Halliburton isn’t a growth stock but set up to grow over the next five to ten years. The forecast for 2025 is weak; the company is expecting a low-single-digit contraction in revenue and earnings, but the longer-term forecast is good. Growth will resume in 2026, sufficient to create growth in the two-year stack and be sustained into the next decade. Growth should run at a mid-single-digit CAGR, with EPS growing at roughly double the pace.
The forecasts put the stock at only 6.5X its 2030 EPS outlook, which is a value, and the estimates may be light. While oilfield spending is expected to slow and stagnate, it will focus on efficiency and low-carbon solutions that Halliburton is positioned to provide.
4- Halliburton Gushes With Capital Returns
[content-module:DividendStats|NYSE:HAL]Assuming those same FCF margin metrics, the company could increase the dividend and buybacks in 2025 regardless of earnings growth, and the dividend potentially by a significant amount. The FCF payout ratio is only 60%, and the buybacks in 2024 reduced the count by 2.4% on average for Q4 and 0.7% for the year.
That means there is room in the cash flow and fewer shares to pay with buybacks expected to continue. The dividend yield is over 2.6% and attractive for that reason alone.
5- The Analysts Reset Their Price Targets; The Market Overcorrected
As bullish as the analysts are, the story from late 2024 and early 2025 is that they lowered their price targets. That led the market into a correction, but it has overcorrected, providing a value opportunity in HAL stock. The lowest target tracked by MarketBeat is $29, or 13% above the April 1 closing price, while the consensus forecasts a more robust 45% upside.
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