Oppenheimer Sees The Risk/Reward In Halliburton As Favorable; Initiates Outperform

Oppenheimer analyst James Schumm initiated coverage on Halliburton Company (NYSE:HAL) with an Outperform rating and a $71 price target, which implies an upside of 72% from current levels.

Schumm wrote, “Halliburton’s stock has retreated ~40% in conjunction with falling oil prices and the proposed merger with Baker Hughes. However, we believe the risk/reward is skewed very positively as the market is pricing in significant reductions in activity and, we think, taking a myopic view on the combination with Baker. The proposed merger will create a more valuable entity that can more effectively compete with Schlumberger internationally and will remove a major competitor from the marketplace.”

“Meanwhile, Halliburton continues to implement self-help measures to improve profitability, FCF generation and strengthen its balance sheet. We believe investors that look past the uncertainty in 2015 will be handsomely rewarded over the next two years.”

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