Commenting on the price decline in Halliburton shares (NYSE: HAL) from their high of more than $57 in late July, to the current price of approximately $42, Canaccord Genuity oilfield services analyst Scott Burk said to investors the valuation may reflect the likelihood of imminent recession.

He said in a note to investors, “HAL maintains its positive outlook despite equity market turmoil. The stock could have more downside, but we believe the recent correction has already priced in a 40-50% likelihood of imminent recession.”

Mr. Burk added that he already assumes essentially flat North American revenue after the fourth quarter of 2011, but 1-3% quarterly international growth for 2012. “A recession or prolonged oil prices well below $80 per barrel would likely reverse even that slow growth trajectory and lead to margin compression as well.”

In conjunction with these comments, Mr. Burk increased his third quarter earnings per share estimates for HAL to $0.88 (from $0.85) to reflect revenue growth of 6.5% in North America (matching the quarter to date horizontal rig count increase), but flat North American margins and only minor improvement in international margins versus the second quarter of 2011.