Kailash Concepts
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Halliburton is priced for shrinking margins just as fracking capacity tightens. Revenue has been roughly flat since 2023 while operating margin fell from 17.7% to 13.1% and EPS from $3.13 to $2.37, so it trades at 15.3x expected earnings versus about 22x for SLB and Baker Hughes. Years of underinvestment have left less North American frac equipment, and management says its fracking schedule is fully booked. Each one-point margin gain adds about $0.20 of EPS. x.comÂ
Halliburton is priced for shrinking margins just as North American frack fleets run out of spare capacity. International revenue rose from $10.7 billion in 2022 to $13.4 billion over the 12 months to June 2026, about 60% of the total, and Halliburton expects about $16 billion by 2028, worth about $0.40 of EPS at a 15% margin. It produced about $2 billion of free cash flow a year even as its margin fell from about 17% to 13%, and retired over 6% of its shares in two and a half years. x.com x.comÂ
Halliburton and SLB are the crown energy bets if the oil supply disruption persists or worsens: more oil must be found, and damaged sites will need more repairs. The oil supply chain is already hurt, and if the situation is not resolved within days, inflation will spike; longer disruptions, more combat or a ground invasion would also spread fear. The energy trade began months ago and its initial move is done, but it could give much more if the conflict continues. x.comÂ
Halliburton, a high-quality oil service company the market discarded, is well positioned to benefit from rebuilding Venezuela's oil infrastructure, where it kept offices through the rough years, and from a coming deep-sea offshore boom. The chart shows a backtest after an inverse head-and-shoulders breakout and a bullish inside day, with the next target around $43. x.comÂ
Baker Hughes looks about one-third too cheap, as its energy technology business is being thrown out with the oil-services selloff. Its energy portfolio is incredible. x.comÂ
Frac companies are delivering the biggest surprises relative to their stock prices among oil services, which favors ProFrac, Halliburton, ProPetro, Patterson-UTI and KLX Energy Services. x.comÂ
Baker Hughes, Valero Energy and Cheniere Energy stand to profit from a dual catalyst: the oil shock and tariff refunds. The three were identified by using AI to comb through large amounts of data. x.comÂ
TechnipFMC is a picks-and-shovels play on rising oil prices, as the third-largest US oil and pipeline name with the strongest growth, best IBD metrics and best technical upside. Baker Hughes and SLB are good, but not this good. x.comÂ
BP has further to go as new CEO Meg O'Neill resets it into a traditional oil and gas major focused on returns and cash flow. Renewable spending is being cut by $5-10 billion while oil and gas investment rises 20% to $10 billion a year. BP plans $20 billion of asset sales by 2027 and aims to cut debt from $22 billion to $14-18 billion, pausing buybacks. Continued instability in the Strait of Hormuz adds support, though the climate pullback faces ESG pushback. x.comÂ
Iran opening for business, with $300B of Western investment and half reportedly committed, could lift companies tied to Middle East rebuilding. Schlumberger gets paid to revive Iran's capital-starved oil fields at $60 or $90 crude. TotalEnergies has the clearest path back via its 2017 South Pars deal, and Boeing could revive IranAir's $16.5B, 80-jet order. Perma-Pipe's Gulf projects were only delayed by the war, and Energy Recovery has nearly 99% of sales in the Middle East. x.com x.com x.com … Show more
Oil refiners look too late to chase because they are over-earning, and margins will likely compress down the line. Refiners ran as Chinese utilization fell about 40% and 40% of Russian capacity went offline because of the war, pushing product-versus-crude margins to all-time highs of $80-100. Oil services names such as SLB look better placed to benefit. x.comÂ
Flowco's artificial-lift business looks best positioned long term given the Lower 48 E&P mindset, and Lower 48 oilfield service names are only starting to price in the opportunity. Patterson-UTI, ProPetro and RPC are beginning to react. Flowco is a decent business with industrial margins, and it is surprising it is not trading better after its recent secondary offering. x.comÂ
