Halliburton (HAL) is expected to deliver a positive Q2 update as stronger North America fracking activity lifts completion and production revenue and margins toward the high end of guidance, UBS Securities said Wednesday in a report.
North America fracking fundamentals are firming, with pricing increases beginning to come through, though the improvement is expected to be "a gradual grind higher rather than a massive" increase from the previous quarter, UBS said.
Halliburton also is "ready to get back to work" in the Middle East and expects operations to return to normal by the end of Q3 if the US-Iran ceasefire holds, setting up "a strong catchup period" in Q4 and 2027, the report said.
UBS forecast Q2 adjusted EPS of $0.55 on revenue of $5.54 billion, compared with the Wall Street consensus for EPS of $0.54 on revenue of $5.50 billion. Results are expected July 21.
UBS raised its price target on Halliburton stock to $40 from $39 and reiterated its neutral rating.
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