Halliburton Jumps on Citi Upgrade, Rising Crude Prices

Halliburton was raised to buy at Citi on an expectation of improved free cash flow.
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Shares of Halliburton  (HAL) - Get Report were rising nearly 6% Tuesday after analysts at Citi updated their oil service coverage with an upgrade to buy from neutral for the Houston-based company. 

The firm made the call based on a combination of an estimate revision to the upside and improved free cash flow.

Halliburton was also benefiting from a rise in oil prices as international benchmark Brent crude and West Texas crude both climbed in trading Tuesday. 

The commodity was rose despite a bearish report from the International Energy Association that lowered its 2021 oil demand estimate by 170,000 barrels of oil per day due to weaker expectations for jet fuel/kerosene. 

Brent was recently trading at $50 per barrel as recent positive vaccination news was seen as a positive for increased demand. But there are also concerns that the holiday season will lead to an increase in infections and a potential resumption of lockdown measures. 

In October, Halliburton missed on third-quarter revenue expectations, posting a net loss of $19 million, or 2 cents a share, vs. net income of $296 million, or 34 cents a share, in the year-earlier quarter. On an adjusted basis, the company said it earned $100 million, or 11 cents an adjusted share.

The adjusted per-share earnings number beat analysts' forecasts of 8 cents.

Total sales rang in at $2.97 billion, down 46% from the $5.5 billion it brought in a year earlier and below analysts’ forecasts of $3.09 billion. Cash flow from operations came in at $420 million, with free cash flow of $265 million, Halliburton said.