Is Halliburton Company (HAL) overvalued?
On Equity Rank's model estimate, HAL trades 12% above its fair value. Halliburton Company (HAL) last closed at $31.84; the multi-method model fair value is $28.29.
| Price | Model fair value | Price vs model |
|---|---|---|
| $31.84 | $28.29 | 13% above |
What the answer rests on
- 4 of 13 valuation methods put HAL's value above its price and 9 put it below, so the methods disagree.
- To justify today's price, HAL's free cash flow would need to grow about 1.4% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 10.8% a year.
- HAL trades at 13.9 times its last year's earnings, against a median of 14.9 for 110 profitable Energy companies.
- Over the past year the price sat below the model fair value on 1% of trading days. The gap ranged from 2% below to 41% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind HAL's fair value · What prices assume · Other companies