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NEW YORK (TheStreet) -- Halliburton (HAL) - Get Free Report shares closed trading up 0.11% to $45.40 on Friday after the oil services company had coverage initiated with an "overweight" rating by analysts at JPMorgan today.

While analysts Sean Meakim and Alexander Merchant initiated coverage on the entire oil services sector with a cautious outlook, the firm believes that large scale service providers like Halliburton still have potential upside.

Halliburton received a $51 price target, which represents a potential 12% upside from the stock's current price.

The firm is especially keen on the company's pending $35 billion merger with Baker Hughes (BHI) , a marriage that the firm says will "create a powerhouse North American competitor."

Also helping Halliburton shares are rising oil prices.

Brent crude was up $2.75 to $65.33 per barrel and West Texas crude prices were up $2.50 to $60.18 per barrel in regular trading today.

Separately, TheStreet Ratings team rates HALLIBURTON CO as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate HALLIBURTON CO (HAL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, HAL has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • HAL, with its decline in revenue, slightly underperformed the industry average of 1.6%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $812.00 million or 14.88% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, HALLIBURTON CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: HAL Ratings Report