- It’s time to sell Halliburton (NYSE:HAL) and buy Schlumberger (NYSE:SLB) in "one of the more obvious examples of the valuation disconnect today," Guggenheim analysts say in removing HAL from the firm’s Best Ideas list in favor of SLB.
- The firm says SLB now trades at a 30% discount to its 10-year average relative multiple vs. HAL on a forward enterprise value/EBITDA basis.
- While SLB may not have HAL's concentration of U.S. revenue, Guggenheim believes that investors continue to underestimate the incremental earnings contribution that SLB should generate from its data and analytics software, transformation initiatives, integration of Cameron and share repurchases.