Intrinsic value of Halliburton - HAL

Previous Close

$52.85

  Intrinsic Value

$331.00

stock screener

  Rating & Target

str. buy

+526%

Previous close

$52.85

 
Intrinsic value

$331.00

 
Up/down potential

+526%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of HAL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -32.78
  42.00
  38.30
  34.97
  31.97
  29.28
  26.85
  24.66
  22.70
  20.93
  19.33
  17.90
  16.61
  15.45
  14.40
  13.46
  12.62
  11.86
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
Revenue, $m
  15,887
  22,560
  31,200
  42,110
  55,574
  71,844
  91,133
  113,609
  139,395
  168,567
  201,159
  237,168
  276,564
  319,293
  365,287
  414,471
  466,769
  522,110
  580,432
  641,688
  705,845
  772,889
  842,823
  915,674
  991,485
  1,070,322
  1,152,268
  1,237,428
  1,325,923
  1,417,894
  1,513,499
Variable operating expenses, $m
 
  4,433
  6,038
  8,066
  10,567
  13,590
  17,174
  21,351
  26,142
  31,562
  37,618
  44,067
  51,387
  59,326
  67,872
  77,011
  86,728
  97,011
  107,847
  119,229
  131,150
  143,607
  156,601
  170,137
  184,223
  198,871
  214,097
  229,920
  246,363
  263,452
  281,216
Fixed operating expenses, $m
 
  20,002
  20,502
  21,014
  21,540
  22,078
  22,630
  23,196
  23,776
  24,370
  24,980
  25,604
  26,244
  26,900
  27,573
  28,262
  28,969
  29,693
  30,435
  31,196
  31,976
  32,775
  33,595
  34,435
  35,295
  36,178
  37,082
  38,009
  38,960
  39,934
  40,932
Total operating expenses, $m
  22,665
  24,435
  26,540
  29,080
  32,107
  35,668
  39,804
  44,547
  49,918
  55,932
  62,598
  69,671
  77,631
  86,226
  95,445
  105,273
  115,697
  126,704
  138,282
  150,425
  163,126
  176,382
  190,196
  204,572
  219,518
  235,049
  251,179
  267,929
  285,323
  303,386
  322,148
Operating income, $m
  -6,778
  -1,875
  4,659
  13,030
  23,467
  36,175
  51,328
  69,063
  89,478
  112,635
  138,561
  167,497
  198,933
  233,067
  269,842
  309,198
  351,072
  395,406
  442,150
  491,263
  542,719
  596,507
  652,628
  711,103
  771,967
  835,273
  901,089
  969,498
  1,040,600
  1,114,508
  1,191,351
EBITDA, $m
  -5,275
  91
  7,287
  16,492
  27,958
  41,911
  58,539
  77,992
  100,379
  125,766
  154,186
  185,634
  220,082
  257,483
  297,776
  340,893
  386,766
  435,332
  486,536
  540,333
  596,696
  655,610
  717,079
  781,125
  847,786
  917,121
  989,203
  1,064,125
  1,141,994
  1,222,936
  1,307,089
Interest expense (income), $m
  659
  586
  938
  1,393
  1,967
  2,676
  3,533
  4,548
  5,732
  7,089
  8,625
  10,342
  12,238
  14,312
  16,562
  18,984
  21,573
  24,327
  27,241
  30,312
  33,537
  36,915
  40,445
  44,128
  47,964
  51,956
  56,107
  60,421
  64,905
  69,565
  74,408
Earnings before tax, $m
  -7,625
  -2,462
  3,722
  11,638
  21,500
  33,500
  47,796
  64,515
  83,746
  105,545
  129,936
  157,156
  186,695
  218,755
  253,280
  290,214
  329,499
  371,079
  414,909
  460,951
  509,182
  559,591
  612,182
  666,975
  724,003
  783,317
  844,982
  909,077
  975,695
  1,044,943
  1,116,943
Tax expense, $m
  -1,858
  0
  1,005
  3,142
  5,805
  9,045
  12,905
  17,419
  22,611
  28,497
  35,083
  42,432
  50,408
  59,064
  68,386
  78,358
  88,965
  100,191
  112,025
  124,457
  137,479
  151,090
  165,289
  180,083
  195,481
  211,496
  228,145
  245,451
  263,438
  282,135
  301,575
Net income, $m
  -5,763
  -2,462
  2,717
  8,496
  15,695
  24,455
  34,891
  47,096
  61,135
  77,048
  94,853
  114,724
  136,288
  159,691
  184,895
  211,856
  240,534
  270,888
  302,883
  336,494
  371,703
  408,502
  446,893
  486,892
  528,522
  571,822
  616,837
  663,626
  712,257
  762,809
  815,369

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,009
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  27,000
  32,648
  45,152
  60,941
  80,426
  103,971
  131,886
  164,413
  201,730
  243,946
  291,112
  343,225
  400,238
  462,074
  528,635
  599,813
  675,497
  755,586
  839,989
  928,637
  1,021,483
  1,118,507
  1,219,716
  1,325,143
  1,434,856
  1,548,946
  1,667,537
  1,790,778
  1,918,846
  2,051,945
  2,190,303
Adjusted assets (=assets-cash), $m
  22,991
  32,648
  45,152
  60,941
  80,426
  103,971
  131,886
  164,413
  201,730
  243,946
  291,112
  343,225
  400,238
  462,074
  528,635
  599,813
  675,497
  755,586
  839,989
  928,637
  1,021,483
  1,118,507
  1,219,716
  1,325,143
  1,434,856
  1,548,946
  1,667,537
  1,790,778
  1,918,846
  2,051,945
  2,190,303
Revenue / Adjusted assets
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
Average production assets, $m
  10,325
  14,664
  20,280
  27,372
  36,123
  46,699
  59,236
  73,846
  90,607
  109,569
  130,753
  154,159
  179,767
  207,541
  237,437
  269,406
  303,400
  339,371
  377,281
  417,097
  458,799
  502,378
  547,835
  595,188
  644,466
  695,709
  748,974
  804,328
  861,850
  921,631
  983,774
Working capital, $m
  7,654
  5,414
  7,488
  10,107
  13,338
  17,243
  21,872
  27,266
  33,455
  40,456
  48,278
  56,920
  66,375
  76,630
  87,669
  99,473
  112,024
  125,306
  139,304
  154,005
  169,403
  185,493
  202,278
  219,762
  237,957
  256,877
  276,544
  296,983
  318,222
  340,295
  363,240
Total debt, $m
  12,377
  19,533
  29,011
  40,979
  55,749
  73,596
  94,755
  119,411
  147,697
  179,697
  215,449
  254,950
  298,166
  345,038
  395,492
  449,444
  506,813
  567,520
  631,497
  698,693
  769,070
  842,615
  919,330
  999,245
  1,082,407
  1,168,887
  1,258,779
  1,352,196
  1,449,272
  1,550,160
  1,655,035
Total liabilities, $m
  17,591
  24,747
  34,225
  46,193
  60,963
  78,810
  99,969
  124,625
  152,911
  184,911
  220,663
  260,164
  303,380
  350,252
  400,706
  454,658
  512,027
  572,734
  636,711
  703,907
  774,284
  847,829
  924,544
  1,004,459
  1,087,621
  1,174,101
  1,263,993
  1,357,410
  1,454,486
  1,555,374
  1,660,249
Total equity, $m
  9,409
  7,901
  10,927
  14,748
  19,463
  25,161
  31,916
  39,788
  48,819
  59,035
  70,449
  83,060
  96,858
  111,822
  127,930
  145,155
  163,470
  182,852
  203,277
  224,730
  247,199
  270,679
  295,171
  320,685
  347,235
  374,845
  403,544
  433,368
  464,361
  496,571
  530,053
Total liabilities and equity, $m
  27,000
  32,648
  45,152
  60,941
  80,426
  103,971
  131,885
  164,413
  201,730
  243,946
  291,112
  343,224
  400,238
  462,074
  528,636
  599,813
  675,497
  755,586
  839,988
  928,637
  1,021,483
  1,118,508
  1,219,715
  1,325,144
  1,434,856
  1,548,946
  1,667,537
  1,790,778
  1,918,847
  2,051,945
  2,190,302
Debt-to-equity ratio
  1.315
  2.470
  2.660
  2.780
  2.860
  2.930
  2.970
  3.000
  3.030
  3.040
  3.060
  3.070
  3.080
  3.090
  3.090
  3.100
  3.100
  3.100
  3.110
  3.110
  3.110
  3.110
  3.110
  3.120
  3.120
  3.120
  3.120
  3.120
  3.120
  3.120
  3.120
Adjusted equity ratio
  0.235
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242
  0.242

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -5,763
  -2,462
  2,717
  8,496
  15,695
  24,455
  34,891
  47,096
  61,135
  77,048
  94,853
  114,724
  136,288
  159,691
  184,895
  211,856
  240,534
  270,888
  302,883
  336,494
  371,703
  408,502
  446,893
  486,892
  528,522
  571,822
  616,837
  663,626
  712,257
  762,809
  815,369
Depreciation, amort., depletion, $m
  1,503
  1,967
  2,627
  3,462
  4,491
  5,735
  7,210
  8,929
  10,901
  13,132
  15,624
  18,136
  21,149
  24,417
  27,934
  31,695
  35,694
  39,926
  44,386
  49,070
  53,976
  59,103
  64,451
  70,022
  75,819
  81,848
  88,115
  94,627
  101,394
  108,427
  115,738
Funds from operations, $m
  -690
  -495
  5,344
  11,957
  20,186
  30,190
  42,101
  56,025
  72,036
  90,180
  110,477
  132,860
  157,437
  184,107
  212,828
  243,551
  276,228
  310,814
  347,269
  385,565
  425,679
  467,605
  511,344
  556,914
  604,342
  653,670
  704,951
  758,253
  813,651
  871,236
  931,107
Change in working capital, $m
  1,013
  1,601
  2,074
  2,619
  3,231
  3,905
  4,629
  5,394
  6,189
  7,001
  7,822
  8,642
  9,455
  10,255
  11,039
  11,804
  12,551
  13,282
  13,997
  14,701
  15,398
  16,090
  16,784
  17,484
  18,195
  18,921
  19,667
  20,438
  21,239
  22,073
  22,945
Cash from operations, $m
  -1,703
  -2,097
  3,271
  9,339
  16,955
  26,285
  37,472
  50,630
  65,847
  83,179
  102,655
  124,218
  147,982
  173,853
  201,790
  231,747
  263,677
  297,532
  333,272
  370,863
  410,282
  451,514
  494,560
  539,429
  586,147
  634,749
  685,284
  737,814
  792,412
  849,163
  908,162
Maintenance CAPEX, $m
  0
  -1,215
  -1,725
  -2,386
  -3,220
  -4,250
  -5,494
  -6,969
  -8,688
  -10,660
  -12,890
  -15,383
  -18,136
  -21,149
  -24,417
  -27,934
  -31,695
  -35,694
  -39,926
  -44,386
  -49,070
  -53,976
  -59,103
  -64,451
  -70,022
  -75,819
  -81,848
  -88,115
  -94,627
  -101,394
  -108,427
New CAPEX, $m
  -798
  -4,339
  -5,616
  -7,092
  -8,752
  -10,575
  -12,538
  -14,610
  -16,761
  -18,962
  -21,185
  -23,406
  -25,607
  -27,774
  -29,896
  -31,969
  -33,994
  -35,972
  -37,910
  -39,816
  -41,702
  -43,578
  -45,458
  -47,353
  -49,277
  -51,244
  -53,265
  -55,354
  -57,522
  -59,781
  -62,143
Cash from investing activities, $m
  -710
  -5,554
  -7,341
  -9,478
  -11,972
  -14,825
  -18,032
  -21,579
  -25,449
  -29,622
  -34,075
  -38,789
  -43,743
  -48,923
  -54,313
  -59,903
  -65,689
  -71,666
  -77,836
  -84,202
  -90,772
  -97,554
  -104,561
  -111,804
  -119,299
  -127,063
  -135,113
  -143,469
  -152,149
  -161,175
  -170,570
Free cash flow, $m
  -2,413
  -7,650
  -4,071
  -139
  4,983
  11,460
  19,440
  29,052
  40,398
  53,557
  68,580
  85,429
  104,238
  124,930
  147,477
  171,844
  197,988
  225,866
  255,436
  286,661
  319,509
  353,960
  389,999
  427,625
  466,848
  507,686
  550,171
  594,346
  640,264
  687,987
  737,591
Issuance/(repayment) of debt, $m
  -3,097
  7,319
  9,478
  11,968
  14,769
  17,847
  21,159
  24,656
  28,286
  32,000
  35,752
  39,501
  43,216
  46,872
  50,453
  53,953
  57,369
  60,707
  63,978
  67,195
  70,378
  73,544
  76,716
  79,914
  83,162
  86,481
  89,892
  93,417
  97,076
  100,889
  104,875
Issuance/(repurchase) of shares, $m
  186
  4,799
  309
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -2,920
  12,118
  9,787
  11,968
  14,769
  17,847
  21,159
  24,656
  28,286
  32,000
  35,752
  39,501
  43,216
  46,872
  50,453
  53,953
  57,369
  60,707
  63,978
  67,195
  70,378
  73,544
  76,716
  79,914
  83,162
  86,481
  89,892
  93,417
  97,076
  100,889
  104,875
Total cash flow (excl. dividends), $m
  -5,448
  4,468
  5,716
  11,829
  19,753
  29,307
  40,599
  53,708
  68,684
  85,558
  104,332
  124,930
  147,454
  171,802
  197,931
  225,797
  255,357
  286,573
  319,414
  353,856
  389,887
  427,504
  466,715
  507,540
  550,010
  594,166
  640,063
  687,763
  737,339
  788,876
  842,466
Retained Cash Flow (-), $m
  6,053
  -4,799
  -3,026
  -3,821
  -4,715
  -5,698
  -6,755
  -7,872
  -9,031
  -10,216
  -11,414
  -12,611
  -13,797
  -14,964
  -16,108
  -17,225
  -18,316
  -19,381
  -20,426
  -21,453
  -22,469
  -23,480
  -24,492
  -25,514
  -26,550
  -27,610
  -28,699
  -29,824
  -30,993
  -32,210
  -33,483
Prev. year cash balance distribution, $m
 
  3,846
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3,515
  2,690
  8,008
  15,037
  23,609
  33,844
  45,836
  59,654
  75,341
  92,918
  112,319
  133,657
  156,837
  181,823
  208,572
  237,041
  267,192
  298,988
  332,403
  367,418
  404,024
  442,222
  482,026
  523,459
  566,556
  611,364
  657,938
  706,347
  756,666
  808,984
Discount rate, %
 
  8.70
  9.14
  9.59
  10.07
  10.57
  11.10
  11.66
  12.24
  12.85
  13.50
  14.17
  14.88
  15.62
  16.41
  17.23
  18.09
  18.99
  19.94
  20.94
  21.98
  23.08
  24.24
  25.45
  26.72
  28.06
  29.46
  30.93
  32.48
  34.11
  35.81
PV of cash for distribution, $m
 
  3,233
  2,259
  6,084
  10,244
  14,282
  17,993
  21,181
  23,681
  25,374
  26,198
  26,141
  25,296
  23,759
  21,679
  19,228
  16,581
  13,902
  11,331
  8,974
  6,904
  5,155
  3,733
  2,620
  1,780
  1,170
  742
  455
  268
  152
  83
Current shareholders' claim on cash, %
  100
  85.0
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3

Halliburton Company provides services and products to the upstream oil and natural gas industry 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 field. It operates through two segments: the Completion and Production segment, and the Drilling and Evaluation segment. The Completion and Production segment delivers cementing, stimulation, intervention, pressure control, specialty chemicals, artificial lift and completion services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation and wellbore placement solutions that enable customers to model, measure, drill and optimize their well construction activities. It serves national and independent oil and natural gas companies. As of December 31, 2016, it had conducted business in approximately 70 countries around the world.

FINANCIAL RATIOS  of  Halliburton (HAL)

Valuation Ratios
P/E Ratio -7.9
Price to Sales 2.9
Price to Book 4.9
Price to Tangible Book
Price to Cash Flow -26.9
Price to Free Cash Flow -18.3
Growth Rates
Sales Growth Rate -32.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -63.5%
Cap. Spend. - 3 Yr. Gr. Rate -22.9%
Financial Strength
Quick Ratio 25
Current Ratio 0.2
LT Debt to Equity 129.8%
Total Debt to Equity 131.5%
Interest Coverage -11
Management Effectiveness
Return On Assets -16.5%
Ret/ On Assets - 3 Yr. Avg. -1.8%
Return On Total Capital -21.9%
Ret/ On T. Cap. - 3 Yr. Avg. -3%
Return On Equity -46.3%
Return On Equity - 3 Yr. Avg. -9%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 5.4%
Gross Margin - 3 Yr. Avg. 10.7%
EBITDA Margin -34.4%
EBITDA Margin - 3 Yr. Avg. -2.3%
Operating Margin -42.7%
Oper. Margin - 3 Yr. Avg. -9.3%
Pre-Tax Margin -48%
Pre-Tax Margin - 3 Yr. Avg. -12.5%
Net Profit Margin -36.3%
Net Profit Margin - 3 Yr. Avg. -9.5%
Effective Tax Rate 24.4%
Eff/ Tax Rate - 3 Yr. Avg. 26.9%
Payout Ratio -10.8%

HAL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HAL stock intrinsic value calculation we used $15887 million for the last fiscal year's total revenue generated by Halliburton. The default revenue input number comes from 2016 income statement of Halliburton. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HAL stock valuation model: a) initial revenue growth rate of 42% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.7%, whose default value for HAL is calculated based on our internal credit rating of Halliburton, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Halliburton.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HAL stock the variable cost ratio is equal to 20.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $19514 million in the base year in the intrinsic value calculation for HAL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.8% for Halliburton.

Corporate tax rate of 27% is the nominal tax rate for Halliburton. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HAL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HAL are equal to 65%.

Life of production assets of 8.5 years is the average useful life of capital assets used in Halliburton operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HAL is equal to 24%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9409 million for Halliburton - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 867.199 million for Halliburton is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Halliburton at the current share price and the inputted number of shares is $45.8 billion.

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COMPANY NEWS

▶ Schlumbergers Earnings Made Progress in 9M17   [Jan-17-18 03:30PM  Market Realist]
▶ Halliburton Reacts to Crude Oils Price Change   [Jan-16-18 02:05PM  Market Realist]
▶ Halliburtons Next 7-Day Stock Price Forecast   [12:35PM  Market Realist]
▶ Halliburtons 1-Week Returns on January 12   [11:00AM  Market Realist]
▶ Short Interest in Baker Hughes on January 8   [Jan-11-18 01:05PM  Market Realist]
▶ Has Baker Hughes Stock Fallen in 2018?   [11:31AM  Market Realist]
▶ Short Interest in Halliburton on January 4   [09:02AM  Market Realist]
▶ Halliburtons Next 7-Day Stock Price Forecast   [07:33AM  Market Realist]
▶ Will the Rig Count Impact Halliburtons Earnings in 4Q17?   [Jan-10-18 03:30PM  Market Realist]
▶ Halliburtons Estimates for 4Q17 and Beyond   [12:29PM  Market Realist]
▶ "Fast Money" final trades: HAL, DAL and more   [Jan-08-18 05:59PM  CNBC Videos]
▶ Why These 3 Oil Stocks Will Outperform   [Jan-05-18 06:00AM  Investopedia]
▶ IQ 100 new members   [01:20PM  CNBC Videos]
▶ "Fast Money" final trades: HAL, SQ and more   [Jan-03-18 05:59PM  CNBC Videos]
▶ 5 Blue-Chip Stocks to Buy in January   [02:24PM  InvestorPlace]
▶ Halliburtons 1-Week Returns on December 29   [09:48AM  Market Realist]
▶ Cramer's top energy stock picks on rising oil   [Jan-02-18 07:30PM  CNBC Videos]
▶ ETFs with exposure to Halliburton Co. : January 1, 2018   [Jan-01-18 11:38AM  Capital Cube]
▶ What 2018 May Mean For The Oil & Gas Industry   [Dec-29-17 07:29PM  Forbes]
▶ Analysts' Top Oil & Gas Stock Picks For 2018   [Dec-28-17 04:56PM  Forbes]
▶ How to Trade These 2 Hot Oil Stocks   [08:57AM  TheStreet.com]
▶ Large caps are way overvalued: Lamar Villere   [Dec-27-17 03:50PM  CNBC Videos]
▶ Hows Halliburton Reacting to the Change in Crude Oil Prices?   [Dec-26-17 03:25PM  Market Realist]
▶ Halliburtons 1-Week Returns on December 22   [12:21PM  Market Realist]
▶ 5 Energy Stocks to Watch In 2018   [Dec-21-17 12:48PM  InvestorPlace]
▶ Halliburton Stock Could Enter 2018 Uptrend   [Dec-20-17 09:50AM  Investopedia]
▶ Hows Halliburton Reacting to the Crude Oil Price Change?   [Dec-18-17 11:35AM  Market Realist]
▶ Halliburtons 1-Week Returns on December 15   [10:00AM  Market Realist]
▶ "Fast Money" final trades: GM, HAL and more   [Dec-12-17 05:59PM  CNBC Videos]
▶ Why Halliburtons Dividend Yield Is Rising   [09:01AM  Market Realist]
▶ How Did Schlumberger React to Crude Oil Prices Last Week?   [Dec-11-17 04:55PM  Market Realist]
▶ What to Expect from Halliburton This Week   [03:20PM  Market Realist]
▶ Halliburtons Valuation Compared to Its Peers   [12:16PM  Market Realist]
▶ Analyzing Halliburtons Valuation   [12:16PM  Market Realist]
▶ A Peek at Halliburtons Post-3Q17 Net Debt   [10:31AM  Market Realist]
▶ What Drove Halliburtons Revenue in 3Q17   [Dec-08-17 03:40PM  Market Realist]
▶ Halliburton: Managements Views on 4Q17   [02:10PM  Market Realist]
▶ How Halliburtons Stock Price Compares   [12:37PM  Market Realist]
▶ ETFs with exposure to Halliburton Co. : December 7, 2017   [Dec-07-17 01:58PM  Capital Cube]
▶ [$$] GE, Baker Hughes Get a Breather   [Dec-06-17 01:04PM  Barrons.com]
▶ Halliburton 2017 Fourth Quarter Conference Call   [Dec-04-17 05:15PM  Business Wire]
▶ Halliburtons 1-Week Returns on December 1   [12:17PM  Market Realist]
Financial statements of HAL
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