[HAL] Halliburton Thesis 2026: International Growth Tests North America Completion Cycle Weakness
Halliburton Company (NYSE: HAL) FY2025 revenue ~$22-23B (-3 to 0%) with adj. EPS ~$2.20-2.80 reflecting continued post-2024 North America completion + drilling cycle weakness offset by selected International growth (~$11B; +5-10% YoY on Middle East + Latin America NOC capex tailwind) + selected ~30%+ global pressure pumping market share leadership + selected ~3-year continuous dividend track post-2020 reset under continued CEO Jeff Miller (~8-year tenure since June 2017). Leading global oilfield services firm focused on completion + production + drilling services for upstream oil + gas customers. Founded 1919 by Erle Halliburton as New Method Oil Well Cementing Company in Wilson Oklahoma (~106-year heritage; selected initial focus on selected oil well cementing + drilling services); selected various rebrands and acquisitions through history including 1962 Brown & Root acquisition + 1998 Dresser Industries merger + 2017-2020 Macondo settlement period. Headquartered in Houston Texas; ~50,000+ employees globally with ~$22-23B revenue. Two reporting segments: Completion & Production (C&P) ~60% revenue ($13B — pressure pumping + completion fluids + cementing + ~30%+ global pressure pumping market share leadership; major customers Chevron + ExxonMobil + ConocoPhillips + Saudi Aramco), Drilling & Evaluation (D&E) ~40% ($9B — drilling services + drilling fluids + Sperry Drilling rotary steerable + wireline + formation evaluation). International ~50% revenue (~$11B FY2025): Middle East ~$4B (Saudi Aramco + ADNOC + Qatar Petroleum + selected major NOC customers), Latin America ~$3B (Petrobras + Mexico + Argentina), Europe/Africa/CIS ~$2B (post-2022 Russia exit + Africa + European North Sea), Asia Pacific ~$2B (China + India + Indonesia + Australia). Selected post-2024 NOC capex tailwind: Saudi Aramco maximum sustainable capacity (MSC) expansion + unconventional gas program + ADNOC Crude oil capacity expansion (~$50B+ capex 2024-2027) + Petrobras pre-salt continued development + Qatar LNG expansion (post-2024 LNG super-cycle FIDs). North America ~50% revenue (~$11B FY2025; -5 to 0% YoY): post-2024 US Permian completion + drilling cycle weakness reflecting E&P discipline + commodity price compression driving rig count decline ~5-10%; major Permian customers ConocoPhillips + Chevron + ExxonMobil + post-2024 EOG + Devon + selected E&P consolidation reducing service vendor count; pressure pumping pricing pressure (US frac fleet ~250 fleets; pricing erosion ~5-10%); FY2026 expected NA stabilization toward $11-11.5B. CEO Jeff Miller since June 2017 (succeeded Dave Lesar CEO 2000-June 2017 retired). Capital return: ~$0.68-0.72 annual dividend FY2025 (~3-year track post-2020 dividend reset from $0.18 to $0.045 then recovery to $0.17-0.18); $1-2B buyback program FY2025 (aggressive post-2024 capital return on $2-2.5B FCF); investment-grade A3/A- credit ratings. FY2026 thesis: International continued growth + NA cycle stabilization + ~4-year dividend track + capital return acceleration. Risks: major NA E&P capex deceleration, major International project delays, Schlumberger competitive substitution, major oil price decline.
[HAL] Halliburton Thesis 2026: International Growth Tests North America Completion Cycle Weakness
Key Takeaways
- International Growth Catalyst: Selected
50% International revenue ($11B FY2025; +5-10% YoY); selected major international markets Middle East ~$4B + Latin America ~$3B + Europe/Africa/CIS ~$2B + Asia Pacific ~$2B; selected post-2024 Saudi Aramco + ADNOC + Petrobras + selected NOC capex tailwind; FY2026 expected International toward $11.5-12.5B (+5-10%). - North America Completion Cycle Weakness: Selected
50% North America revenue ($11B FY2025; -5 to 0% YoY); selected post-2024 US Permian completion + drilling cycle weakness reflecting selected E&P discipline + selected commodity price compression; selected major Permian customers ConocoPhillips + Chevron + ExxonMobil + selected; FY2026 expected North America stabilization toward $11-11.5B. - Pressure Pumping Market Leadership: Completion & Production segment ~$13B FY2025 (~60% of total); selected ~30%+ global pressure pumping market share leadership; selected post-2024 pressure pumping cycle weakness in NA offset by selected International stability; FY2026 catalyst: continued pressure pumping leadership + selected unconventional International expansion.
- Capital Return + Dividend Reset Recovery:
$0.68-0.72 annual dividend FY2025 ($0.17-0.18/quarter; ~3-year track post-2020 dividend reset from $0.18 to $0.045 then recovery); $1-2B buyback program FY2025; investment-grade A3/A- credit ratings; FCF $2-2.5B; FY2026 expected continued dividend growth + selected buyback acceleration.
Company Background
Halliburton Company (NYSE: HAL) is the leading global oilfield services firm focused on completion + production + drilling services for upstream oil + gas customers. Founded 1919 by Erle Halliburton as New Method Oil Well Cementing Company in Wilson Oklahoma (selected ~106-year heritage; selected initial focus on selected oil well cementing + drilling services); selected various rebrands and acquisitions through history including selected 1962 Brown & Root acquisition + selected 1998 Dresser Industries merger + selected 2017-2020 Macondo settlement period.
Headquartered in Houston Texas; ~50,000+ employees globally with FY2025 revenue ~$22-23B (-3 to 0% YoY) generating ~$2.0-2.5B net income (~9-11% net margin) and ~$2.20-2.80 EPS on ~870M diluted shares.
The company operates two reporting segments: Completion & Production (C&P) ~60% of revenue ($13B — selected pressure pumping + completion fluids + cementing + selected ~30%+ global pressure pumping market share leadership; selected major customers Chevron + ExxonMobil + ConocoPhillips + Saudi Aramco + selected) and Drilling & Evaluation (D&E) ~40% ($9B — selected drilling services + drilling fluids + Sperry Drilling rotary steerable + selected wireline + formation evaluation).
CEO Jeff Miller since June 2017 (~8-year tenure; succeeded Dave Lesar CEO 2000-June 2017 retired who led 2000-2017 Halliburton transformation; Miller ex-Halliburton COO 2014-2017 + ex-various Halliburton roles 1997-2014 + ~25-year company career; concurrent President + CEO + Director). Selected Miller era characterized by: (i) selected 2017 post-Macondo settlement closure ($1.1B); (ii) selected 2020 pandemic cycle navigation; (iii) selected post-2022 cycle recovery; (iv) selected post-2024 NA completion cycle navigation.
International Growth: $11B Trajectory + NOC Capex Tailwind
Halliburton's International revenue ~$11B FY2025 (~50% of total; +5-10% YoY) reflects: (i) selected Middle East ~$4B (selected Saudi Aramco + ADNOC + Qatar Petroleum + selected major NOC customers); (ii) selected Latin America ~$3B (selected Petrobras + Mexico + selected Argentina); (iii) selected Europe/Africa/CIS ~$2B (selected post-2022 Russia exit + selected Africa + selected European North Sea + selected); (iv) selected Asia Pacific ~$2B (selected China + India + selected Indonesia + Australia).
Selected post-2024 NOC capex tailwind reflected in: (i) Saudi Aramco maximum sustainable capacity (MSC) expansion + selected unconventional gas program; (ii) ADNOC Crude oil capacity expansion (~$50B+ capex 2024-2027); (iii) Petrobras pre-salt continued development; (iv) selected Qatar LNG expansion (post-2024 LNG super-cycle FIDs).
FY2026 expected International toward $11.5-12.5B (+5-10%) reflecting: (i) continued NOC capex tailwind; (ii) selected unconventional International expansion (selected Argentina Vaca Muerta + selected Saudi Arabia unconventional gas); (iii) selected new product launches (selected automated drilling + selected digital drilling); (iv) selected pricing improvement.
Material change rule: International revenue declines below $10B FY2026 (would signal severe NOC capex pause + competitive intensity from Schlumberger + selected; ~$300-500M annual revenue at-risk per 5% International decline) OR major Saudi Aramco contract loss OR major regional disruption.
North America Completion Cycle: $11B Trajectory
North America revenue ~$11B FY2025 (~50% of total; -5 to 0% YoY) reflects: (i) selected post-2024 US Permian completion + drilling cycle weakness (selected E&P discipline + selected commodity price compression driving rig count decline ~5-10%); (ii) selected major Permian customers ConocoPhillips + Chevron + ExxonMobil + selected (selected post-2024 EOG + Devon + selected E&P consolidation reducing service vendor count); (iii) selected pressure pumping pricing pressure (selected US frac fleet ~250 fleets; selected pricing erosion ~5-10%); (iv) selected Canadian oil sands stability.
FY2026 expected North America stabilization toward $11-11.5B reflecting: (i) selected post-2024 US E&P capex stabilization; (ii) selected continued pressure pumping efficiency improvements; (iii) selected post-2024 oil price stabilization; (iv) selected Canadian heavy oil cycle.
Pressure Pumping Leadership + Capital Return
Selected ~30%+ global pressure pumping market share leadership via Halliburton Zeus electric pressure pumping fleet + selected ~95+ frac fleets globally. Selected ~$5B+ FY2025 pressure pumping revenue within C&P segment.
Capital return: ~$0.68-0.72 annual dividend FY2025 (~3-year track post-2020 dividend reset from $0.18/quarter to $0.045 then recovery to $0.17-0.18; selected dividend yield ~2.0-2.5%); $1-2B buyback program FY2025 (selected aggressive post-2024 capital return on $2-2.5B FCF generation); investment-grade A3/A- credit ratings.
Key Core Metrics
| Metric | FY2022 | FY2023 | FY2024 | FY2025E | FY2026E |
|---|---|---|---|---|---|
| Total Revenue | $20.30B | $23.02B | $22.94B | $22-23B | $22.5-24B |
| Completion & Production | $11.6B | $13.4B | $13.5B | $13B | $13-14B |
| Drilling & Evaluation | $8.7B | $9.6B | $9.4B | $9B | $9-10B |
| North America Revenue | $9.5B | $11.0B | $11.5B | $11B | $11-11.5B |
| International Revenue | $10.8B | $12.0B | $11.4B | $11B | $11.5-12.5B |
| Adj. Operating Margin | 17% | 19% | 18% | 17-19% | 17-19% |
| Adj. EPS | $2.10 | $3.13 | $3.15 | $2.20-2.80 | $2.50-3.20 |
| FCF | $1.5B | $2.3B | $2.5B | $2-2.5B | $2-2.7B |
| Capital Return | FY2024 | FY2025E | FY2026E |
|---|---|---|---|
| Dividend per Share | $0.68 | $0.68-0.72 | $0.72-0.78 |
| Dividend Continuous Years | ~2 | ~3 | ~4 |
| Buybacks | $1.0B | $1.0-2.0B | $1.0-2.0B |
| Total Capital Return | $1.6B | $1.6-2.6B | $1.65-2.7B |
| Credit Rating | A3/A- | A3/A- | A3/A- |
Market Evaluation
HAL currently trades at ~10-13x earnings reflecting: (i) selected post-2024 NA completion cycle weakness; (ii) selected International NOC capex tailwind; (iii) selected ~30%+ global pressure pumping leadership; (iv) selected ~3-year continuous dividend track post-2020 reset; offset by (v) selected oil price cyclicality; (vi) selected Schlumberger competitive intensity.
Selected peer comparison: Schlumberger (SLB ~13-16x P/E diversified OFSE + new energy), Baker Hughes (BKR ~14-18x P/E energy technology + LNG), Weatherford (WFRD ~10-13x P/E OFSE recovery), NOV (NOV ~10-13x P/E drilling equipment). HAL valuation reflects mid-tier OFSE positioning with selected pressure pumping leadership.
FY2026 catalysts: (i) International growth continued; (ii) NA cycle stabilization; (iii) ~4-year dividend track; (iv) capital return acceleration. Risks: (i) major NA E&P capex deceleration; (ii) major International project delays; (iii) Schlumberger competitive substitution; (iv) major oil price decline.
International Growth and NA Cycle Weakness
The FY2026 thesis hinges on Halliburton's ability to capture continued International NOC capex tailwind + sustain NA completion cycle stabilization + maintain ~4-year dividend track. International trajectory toward $11.5-12.5B FY2026 (+5-10%) signals selected continued Saudi Aramco + ADNOC + Petrobras + selected NOC capex.
NA at $11-11.5B FY2026 (stable) reflects continued post-2024 cycle stabilization + pressure pumping efficiency. Total revenue $22.5-24B FY2026 (+0-5%) + adj. EPS $2.50-3.20 (+10-15%) reflects selected operational leverage + buyback compounding.
Material risks: (i) International below $10B; (ii) major NA E&P capex deceleration; (iii) Schlumberger competitive substitution; (iv) major oil price decline below $60/bbl.
FY2026-2027 base case: revenue $22.5-24B (+0-5%) + $23-25B (+3-7%); adj. EPS $2.50-3.20 + $2.80-3.60 (+10-15% growth); International $11.5-12.5B + $12-13B; NA $11-11.5B + $11.5-12B; capital return $1.65-2.7B + $1.8-2.8B; dividend $0.72-0.78 + $0.78-0.85 maintaining 4-5 consecutive year dividend track post-2020 reset. Selected category-leading OFSE franchise + selected International NOC capex tailwind + selected continued capital return discipline support continued strategic positioning through FY2027.
