Key Insights
- The projected fair value for Halliburton is US$49.64 based on 2 Stage Free Cash Flow to Equity
- Halliburton’s US$34.48 share price signals that it might be 31% undervalued
- Our fair value estimate is 2.3% higher than Halliburton’s analyst price target of US$48.52
How far off is Halliburton Company (NYSE:HAL) from its intrinsic value? Using the most recent financial data, we’ll take a look at whether the stock is fairly priced by taking the forecast future cash flows of the company and discounting them back to today’s value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Models like these may appear beyond the comprehension of a lay person, but they’re fairly easy to follow.
We generally believe that a company’s value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. For…
