11:00 AM EDT, 10/22/2025 (MT Newswires) -- Halliburton ( HAL ) is benefiting from reset estimates, cost reductions, and new power generation initiatives following "strong" Q3 results, RBC Capital Markets said.

The brokerage said in a Tuesday note that the consensus estimates for Halliburton ( HAL ) have come down significantly over the past year, which it sees as resetting expectations and improving the stock's setup.

RBC said the company trimmed about $100 million of quarterly costs by consolidating operating bases and adjusting headcount, plans to cut 2026 capital expenditure by about 30% to $1 billion, and will participate economically in international distributed power projects through its VoltaGrid partnership, initially focused on the Middle East.

Halliburton's ( HAL ) free cash flow is expected to reach about $1.8 billion in 2026, representing a yield of roughly 9%. The firm also noted the stock continues to trade at a discount to peers and its historical average valuation.

RBC said potential catalysts include stronger commodity prices, higher utilization, and new power contracts, while noting the company's returns-focused management plans to return most free cash flow to shareholders, though buybacks may be more conservative in 2026.

The firm upgraded Halliburton ( HAL ) to outperform from sector perform and raised its price target to $31 from $26.

Shares of Halliburton ( HAL ) were up more than 3% in recent Wednesday trading.

Price: 26.05, Change: +0.81, Percent Change: +3.21