NEW YORK (TheStreet) -- Halliburton (HAL) shares closed trading up 2.6% to $59.08 on Monday.
The bump came on the heels of a note from Sterne Agee analyst Stephen Gengaro. Gengaro wrote that a change from the inhibiting weather conditions that hurt the oil services industry in the first quarter would lead to a solid rise in business in the second and third quarters this year.
The Sterne Agee note cites reports of low well counts during the first quarter, including a 2.5% sequential decline in well counts.
"Difficult conditions across the U.S. negatively impacted efficiency at well sites during Q1. The problems included weather-related logistical difficulties and freezing temperatures that limited the ability to work," Gengaro said in the note.
However, the seasonal change of those conditions "could lead to a solid rise in Q2 and Q3 demand for completion services, including pressure pumping, coiled tubing and proppants," the note said.
Halliburton is set to release its quarterly earnings report on April 21.
TheStreet Ratings team rates HALLIBURTON CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HALLIBURTON CO (HAL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 4.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that HAL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.75 is high and demonstrates strong liquidity.
- Powered by its strong earnings growth of 42.85% and other important driving factors, this stock has surged by 43.37% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- HALLIBURTON CO has improved earnings per share by 42.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HALLIBURTON CO reported lower earnings of $2.37 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($3.93 versus $2.37).
- Net operating cash flow has slightly increased to $1,898.00 million or 9.01% when compared to the same quarter last year. Despite an increase in cash flow, HALLIBURTON CO's cash flow growth rate is still lower than the industry average growth rate of 23.27%.
- You can view the full analysis from the report here: HAL Ratings Report