EPS cut on further hydraulic fracturing slowdown
We cut EPS forecasts (e.g. FY19 by 12%) following HAL's downbeat outlook for near-term onshore US fraccing, its second bearish guide in three months. We forecast a 17% peak to trough decline in US fracc crews, with HAL revenues declining by a proportionate amount. We see a H219 pick-up as E&Ps gear up to fill new oil pipelines from the Permian. We remain Neutral with a $44 price target (from $45).Halliburton assists its customers throughout the lifecycle of the reservoir, from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion and optimizing production throughout the life of the asset. The company's segments are: Completion and Production, which delivers cementing, stimulation, intervention, pressure control, specialty chemicals, artificial lift and completion products and services; and Drilling and Evaluation, which provides field and reservoir modeling, drilling, evaluation and wellbore placement solutions that enable customers to model, measure, drill and optimize their well construction activities.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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