$13.43
$43.07
bear $13.43
base $30.90
bull $43.07
margin of safety $17.50
market price* $33.50
Halliburton is one of the world's two largest oilfield service companies. It is paid by oil and gas producers to drill, evaluate, complete (hydraulic fracturing, cementing, well completion tools) and maintain their wells, through two segments: Completion and Production, and Drilling and Evaluation. Revenue follows how much producers spend, so the business is deeply cyclical: revenue went from $32.9 billion in 2014 to $15.9 billion in 2016, back to $24.0 billion in 2018, down to $14.4 billion in 2020 and back to about $23 billion in 2023-2024. In 2025 revenue fell to $22.2 billion as North America revenue dropped 6%, and the company booked $831 million of charges, mostly severance, asset write-offs and facility closures. How we measure earnings. We start from cash generated by operations, strip out swings in receivables, inventories and payables, subtract stock-based pay ($213-290 million a year) as a real cost, and subtract the capital spending needed to keep the equipment fleet running. Capital spending tied to revenue growth is treated as optional; Halliburton has averaged about 6% of revenue on capex. We net against capex the $158-286 million the company has recovered every single year from 2016 to 2025 by selling property and equipment, because it has recurred without a break. Cash severance from the repeated restructurings (2016, 2019-2021, 2025) is left in as a real, recurring cost of this cyclical business. On that basis owner earnings per share were $2.15 (2017), $1.90 (2018), $1.15 (2019), $0.48 (2020), $1.03 (2021), $2.70 (2022), $3.03 (2023), $2.86 (2024) and $1.70 (2025). 2016 was deeply negative because of the one-time $3.5 billion fee paid to Baker Hughes when that merger was abandoned, so it is excluded. Because we value the business before its lenders and then subtract what it owes, we add back interest paid (about $430-600 million a year). Measured that way, the business generated a median of about $2.2 billion a year over 2017-2025, a window that spans a full cycle: the 2018 peak, the 2019-2021 collapse including COVID, the 2022-2024 recovery and the 2025 slowdown. On today's 838 million diluted shares (down from 908 million in 2022 through buybacks) that is about $2.65 per share. Last year (2025) this measure fell about 34%, to $2.20 per share. We start the base case slightly above that, at $2.45 for 2026, only because the company's filed results for the first half of 2026 already show it: cash from operations before working-capital swings rose about 9% from a year earlier and capital spending fell from $656 million to $427 million, an annualized run rate of about $2.56 per share. All cases are discounted at 6%. No growth is credited in any case: the drivers that would produce growth (rising drilling activity, market share gains, new technology, margin expansion) are not secured, and buybacks are not assumed. Intangible amortization is small; this is a business of physical equipment and people, so no extra fade was needed for wasting intangibles. Debt. At June 30, 2026 Halliburton owed $7.07 billion of long-term debt (the nearest maturity is about $90 million due February 2027) against $2.05 billion of cash. We treat about $1 billion of cash as needed to run a business operating in dozens of countries, and include $42 million of minority interests, for net obligations of about $6.07 billion, or $7.24 per share. The debt is long-dated fixed-rate bonds costing roughly 6% (about $430 million of interest on $7.2 billion), there are no financial covenants in the bank agreements, and a $3.5 billion revolving credit line runs to August 2030, so no adjustment for refinancing cost was needed. Base case: $2.45 per share in 2026, then the full-cycle median of $2.65 per share held flat (no growth, no inflation credit) for thirty years, fading to zero over the following ten. What keeps the earnings going is structural and already visible: shale wells lose most of their output within a few years, so producers must keep fracking and completing new wells just to hold production flat, and mature international fields need constant intervention; Halliburton has served that demand since 1919 and generated positive cash before interest in every year of the last decade except 2016, when it paid the one-time Baker Hughes fee. Beyond about thirty years we cannot point to evidence, so the case fades out. The business is worth about $38.13 per share ($32.0 billion); less $7.24 of net debt, the shares are worth about $30.90. Bear case: a downturn like 2019-2021 starts now, with the North America weakness already visible in 2025: business cash flow of $1.10, $0.50 and $1.40 per share over 2026-2028 (close to the 2016 trough excluding the Baker Hughes fee, and the 2020 trough, on today's share count), then a lower normal of $1.90 per share, close to the 2019 level and below 2025, reflecting continued pricing pressure in US fracking and repeated restructuring charges, lasting twenty years in total and fading to zero by year 25. In the worst year cash flow falls just short of the roughly $430 million interest bill for a single year, which the cash balance and undrawn credit line can carry. The business is worth about $20.67 per share ($17.3 billion); less $7.24 of net debt, the shares are worth about $13.43. Bull case: the capital-light approach adopted after 2019 (capex held near 5-6% of revenue while revenue recovered) keeps earnings near the 2022-2024 level. Business cash flow is $2.60 per share in 2026, then $3.40 per share, below the 2022-2024 median of about $3.54 on today's share count, held flat for thirty-four more years and fading to zero over the following ten. The business is worth about $50.31 per share ($42.2 billion); less $7.24 of net debt, the shares are worth about $43.07. What could make this wrong. Halliburton has booked about $14 billion of impairments and other charges since 2015, a sign that capital put into the fleet at cycle peaks has repeatedly failed to earn its keep; if the next cycle repeats that, the bear case is the guide. A permanent decline in North American shale activity, or a faster shift away from oil and gas than the thirty-year base horizon assumes, would cut the long tail of value. On the other side, we give no value to the company's equity investments and marketable securities, and none to buybacks, which have reduced the share count about 8% since 2022. Compared with our previous estimate, the values are higher mainly because we now discount every case at a flat 6% rather than at higher, risk-loaded rates, value the business before interest and then subtract debt, and treat growth-related capex and recurring equipment sale proceeds as described above. Against that, this estimate assumes no growth at all, ends each case at a finite horizon rather than in perpetuity, and uses a harsher downturn in the bear case. The margin-of-safety price is about $17.50 a share. That is roughly 30% above the bear-case value and 43% below the base case, a wide margin reflecting how violently this business's earnings swing and its history of large write-offs.