Jim Cramer on Tesla and Other Stocks

11. Halliburton Company (NYSE:HAL)

Number of Hedge Fund Holders: 41

Cramer called Halliburton Company (NYSE:HAL) one of the “largest pure-play drillers” while mentioning that the stock has had a bad year and was down 20%. He further said:

“With Wall Street expecting nearly 9% earnings growth, Halliburton is even more of a bargain trading at eight times next year’s earnings estimates even though it’s also expected to put up 9% growth in 2025. However, those valuations are only attractive if SLB and Halliburton can make the numbers. Otherwise, their stocks’ going to stay in the doghouse.”

Cramer went on to say:

“Now, the other major oil service company, Halliburton reports in two weeks, November 7. This stock has lagged SLB this year because Hal’s more levered to the North American market rather than the international markets that are doing better. We’ll see what Hal has to say in a fortnight, but if the outlook that SLB just gave us is correct, low growth for international, no growth or declines from North America then Hal should be in worse shape than SLB. Even though Halliburton remains an excellent operator, it’s just the wrong business mix for the current environment.”

Halliburton (NYSE:HAL) is a major provider of products and services in the global energy sector, specializing in production enhancement, cementing solutions, and comprehensive drilling support. For the second quarter, the company reported total revenues of $5.8 billion, with an operating margin of 18%. During the earnings call, CEO Jeffrey Allen Miller expressed optimism about steady growth for the company throughout the remainder of 2024.

Management highlighted strong demand for the company’s services in international markets, noting high activity levels and equipment shortages across all major basins. The environment supports expectations of approximately 10% revenue growth for the international business for the full year.

However, the outlook for North America presents a different picture, as management anticipates a decline in revenues between 6% and 8% compared to the previous year due to reduced activity levels. Looking ahead to the third quarter, Halliburton’s (NYSE:HAL) Completion and Production division is expected to experience a sequential revenue decrease of 1% to 3%, with margins projected to drop by 75 to 125 basis points. In contrast, the Drilling and Evaluation division is forecasted to see a sequential revenue increase of 2% to 4%, accompanied by a rise in margins ranging from 25 to 75 basis points.