Valued at $62 billion by market cap, Schlumberger Limited (SLB) is a leading oilfield services company. The Houston, Texas-based company provides advanced technology and services to oil and gas explorers and producers through its four divisions: Digital & Integration, Reservoir performance, Well Construction, and Production Systems.
Shares of this top oilfield services firm have significantly underperformed the broader market over the past 52 weeks. SLB has declined 24.7% over this time frame, while the broader S&P 500 Index ($SPX) has gained 17%. In 2024 alone, shares of SLB are down 16.6%, compared to SPX's 9.9% gains on a YTD basis.
Narrowing the focus, SLB has also lagged behind the US Oil Equipment & Services iShares ETF’s (IEZ) 12.3% drop over the past 52 weeks and a 4.8% decline on a YTD basis.
Schlumberger has underperformed due to reduced drilling activity in North America, geopolitical uncertainties in the Middle East, inconsistent revenue growth, and fluctuating oil prices. However, the stock recovered roughly 2% on Jul. 19 following its better-than-expected Q2 earnings release, driven by strong global demand and significant revenue growth from international markets, despite warnings of softer activity in North America for the year's second half.
For the current fiscal year, ending in December, analysts expect SLB's EPS to grow 17.1% year over year to $3.49. The company's earnings surprise history is promising. It beats the consensus estimates in each of the last four quarters.
Among 21 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 18 “Strong Buy” ratings, two “Moderate Buys,” and one “Hold.”
On Jul. 22, Evercore ISI Group's analyst James West maintained a “Buy” rating and raised the price target to $74 - the street-high price target. This implies a potential upside of 70.5% from the current price levels.
The mean price target of $65.65 represents a premium of 51.3% to SLB's current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
