Halliburton (HAL) delivered a "messy" Q2 update, with margin pressure in Q2, while the Q3 outlook came in 2% below market estimates, UBS said in a note Sunday.

The miss was due to some temporary headwinds, including higher mobilization costs, which should roll off in Q4, the report said.

Looking ahead, the note said North America activity should improve in H2 and into 2027, while recent Middle East contract wins and International growth should support long-term outlook.

UBS kept its neutral rating while lowering its price target to $39 from $40.

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