Halliburton Co last = 32 USD 1w: +1 (3.2%)
% vs. spot / Price1M6M12MLT(2Y)LT(3Y)
Target Price (consensus)7.6%22.8%92.3% (61.2)--
Upside (Bull Case)7.6%22.8%92.3% (61.2)--
Downside (Bear Case)-----

I have a positive view on HAL's perspectives. First, US frac mkts is under-supplied and expected to remain tight even with newbuild capacity entering the market. Second, I expect that international markets will start to recover in 2018. Third, HAL has begun adding newbuild frac hp in 2017 and it is expected the company to ramp higher in 2018


I like the company's ability to manage the cycle: (1) improve margins through better pricing in upcycle, (2) limit growth of expenses in downcycle. I expect that FCF in 2018 will be higher (vs 2017), and that will create opportunity for organic fleet expansion and/or strategic M&A.