Haliburton Stock (HAL) Downgraded at Barclays Along With Energy Services Sector

Barclays has downgraded Halliburton Company's stock (NYSE: HAL) to Equal Weight from its earlier Overweight standing. This change is primarily due to Halliburton's considerable exposure to global upstream spending and its leverage to oil prices.

Consequently, Halliburton’s price target at Barclays was reduced from $43 to $33. This comes on the same day that Piper Sandler initiated coverage on HAL, with a bullish Overweight rating, and their own $36 price target.

On a year-to-date basis, HAL has declined 27.6%, and with the most recent pre-market trade taking place at $26.50, there remains significant potential upside perceived in the stock.

Barclays analysts have not simply adjusted Haliburton, but revised their outlook on the energy services sector, downgrading it from Positive to Neutral. This decision comes amid a bearish oil macro environment. The firm highlighted a lack of fresh investor capital in the sector and warned of further risks that could lead to additional earnings cuts in 2025.

Since experiencing three years of robust double-digit growth, the energy services sector is now facing a mid-cycle plateau in spending. This shift in momentum has prompted Barclays to adjust ratings on several key industry players.

Conversely, Oceaneering International (NYSE: OII) received an upgrade from Underweight to Equal Weight, reflecting an improved outlook on the firm. Its price target was concurrently raised from $22 to $26.

Barclays suggests that investors focus on companies with minimal exposure to upstream spending.

Barclays’ downgrade of the energy services sector on account of a bearish oil outlook reflects the broader uncertainties and challenges facing the industry. As the sector grapples with these issues, strategic investments and adjustments in company exposures are essential for navigating the anticipated market conditions.