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Asbestos hurts Halliburton
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December 10, 2001: 3:08 p.m. ET
Morgan Stanley halves price target after asbestos verdicts prompt selloff.
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NEW YORK (CNN/Money) - Morgan Stanley cut its target price for Halliburton Co. stock in half Monday after a Baltimore jury last week ordered the oil services company to pay $30 million in damages related to asbestos claims.
Morgan slashed its price target on Halliburton (HAL: up $1.97 to $13.97, Research, Estimates) to $25 from $50, saying the company has lost about $9 billion of market value as the asbestos issue has gained momentum.
"While the penalty appears excessive, we cannot quantify the exact exposure with certainty," analysts James Lewis and Ole Slorer said in a research note Monday.
Halliburton's shares rebounded Monday after tumbling Friday following the ruling.
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CNNfn's Chris Huntington takes a closer look at Halliburton.
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The stock lost about half its value Friday after the company announced that a jury awarded defendants a $30 million judgment against its Dresser Industries Inc. unit for asbestos-related injuries. The shares tumbled to a new 52-week low of $10.94 before bouncing back slightly to close at $12.
However, Halliburton told analysts during a conference call Monday that it still expects fourth-quarter earnings to at least equal second-quarter earnings, and that it was considering buying back shares when the price stabilizes.
Friday's verdict follows a $65 million and a $35.7 million district court judgment in Orange, Texas, and the company said it expects Dresser and Kellogg Brown & Root to be involved in a number of other asbestos claim trials in several states in the coming weeks and months.
Halliburton said the three verdicts obscure favorable judgments it has won in a number of other asbestos-related suits.
Since Oct. 30, Halliburton has reported a total of $122 million in asbestos-related court judgments in Mississippi, Texas and Maryland. It is appealing all of those verdicts.
The verdicts have shaken investors as one company after another succumbs to asbestos lawsuits, including Owens Corning (OWC: unchanged at $1.57, Research, Estimates), W.R. Grace & Co. (GRA: down $0.03 to $1.69, Research, Estimates), USG Corp. (USG: down $0.13 to $4.99, Research, Estimates) and Federal-Mogul Corp. (FMO: down $0.06 to $1.03, Research, Estimates). 
From staff and wire reports
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