Shares of Halliburton Company (NYSE: HAL) have recovered more than 25% since mid-August, but Hightower’s Stephanie Link is convinced now isn’t the time to sell.
Link’s bullish case for Halliburton
Link says the stock could rally further as it is still trading at a “two multiple-point discount”. On CNBC’s “Squawk Box”, she said:
I think you’ll see a recovery in shale spending because the economy is improving on higher oil prices. And this is actually versus down 50% in shale spending last year.
Link expects Halliburton’s “international revenue”, which currently stands at 60%, to double by 2023. Other reasons why she likes the oil and gas company include “great technology and services” that help customers maximise production at a lower cost. She added:
They also have a bit of self-help with a billion-dollar cost savings program. EBIT margin is expected to increase 400 basis points by 2023, and we haven’t even seen price increases yet.
Legacy energy companies won’t be obsolete
Link is confident that a move to EV won’t make the legacy energy companies “obsolete” as both can “coexist”.
These companies are focusing on sustainability too; they’re focusing on clean energy. On top of that, jet fuel demand is on the rise. So, there’s plenty of places for fossil fuels to exist.
Last month, Halliburton won the Energean drilling services contract for offshore Israel. The $20 billion company with a price to earnings ratio of 140 is down 3.0% in the stock market this morning.
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