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Halliburton (HAL +3.8%) shares remain undervalued and should be priced at $54.60, Bernstein's...

Halliburton (HAL +3.8%) shares remain undervalued and should be priced at $54.60, Bernstein's Scott Gruber writes, based on a model of 14x his 2014 EPS forecast of $3.90; $54.60 is 11% higher than the upper end of HAL's recent dutch auction. Gruber thinks the tender offer signifies HAL's confidence in the end-market's demand for shares and indicates it is “more confident" that its Gulf oil liability is "manageable."
Comments (3)
  • What worries me is that HAL plead guilty to destroying documents. The fine from the gov't. is minor. The 50 million donation is minor. But are there civil liabilities of significant $$$ that may bite HAL bigtime?
    26 Jul 2013, 03:27 PM Reply Like
  • I think that's what he means by "manageable"
    26 Jul 2013, 03:38 PM Reply Like
  • Halliburton's financial statements and press releases show that they already have over a billion in reserves to cover potential civil penalties (that may or may not reach that level). A billion is not really a lot of money for HAL and, being that those reserves have already been reported, they are already priced into the stock. Therefore, yes, "manageable".

     

    If one is overly concerned about the plea, those concerns can easily be put to rest by reading the details and realizing that the particular "evidence" referred to, and the resulting charge, are relatively insignificant to the real issue -- fault for the accident.
    28 Jul 2013, 12:26 PM Reply Like
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