Analyzing Halliburton’s Forecast for Next Week

Alex Chamberlin - Author

Mar. 27 2017, Updated 11:05 a.m. ET

Halliburton’s implied volatility

On March 24, 2017, Halliburton’s (HAL) implied volatility was ~25%. Since Halliburton’s 4Q16 financial results were announced on January 23, its implied volatility remained nearly unchanged. Halliburton accounts for 0.13% of the iShares MSCI ACWI Low Carbon Target ETF (CRBN). The energy sector makes up 5.6% of CRBN.

On March 6, Halliburton’s CFO, Mark McCollum, left the company to join Weatherford International (WFT) as its new CFO. Following the news, Halliburton’s implied volatility rose 25.5% on March 8.

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Forecast for Halliburton

Based on Halliburton’s implied volatility and assuming a normal distribution of stock prices and one standard deviation probability of 68.2%, Haliburton stock will likely close between $51.11 and $47.71 in the next seven days. Halliburton’s stock price was $49.41 on March 24, 2017.

What does “implied volatility” mean?

Implied volatility reflects investors’ views of a stock’s potential movement. However, it doesn’t forecast direction. Implied volatility is derived from an option pricing model. Investors should note that the prices’ correctness can be uncertain. On March 24, CARBO Ceramic’s (CRR) implied volatility was ~62%, while Helmerich & Payne’s (HP) implied volatility was ~30%. On the same day, Precision Drilling’s (PDS) implied volatility was ~25%.

Next, we’ll discuss Wall Street analysts’ recommendations for Halliburton.


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