Headquartered in Houston, Texas, Schlumberger Limited (SLB) is a global provider of technology and services to the energy industry with a strong market presence. With a market cap of $56.2 billion, Schlumberger’s extensive portfolio includes solutions in reservoir characterization, drilling, production, and processing, supporting innovation and efficiency across the oil and gas sector.
SLB has significantly underperformed the broader market over the last year. The stock has declined 28.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.2%. In 2024, the stock is down 23.6%, compared to SPX's 20.1% gains on a YTD basis.
Narrowing the focus, SLB’s underperformance is also apparent compared to the US Oil Equipment & Services iShares ETF (IEZ). The exchange-traded fund has declined 11.7% on a YTD basis and 15.4% over the past 52 weeks.
On Oct. 18, shares of Schlumberger dropped over 4% after cautioning that spending growth by oil explorers has slowed in recent months. The company reported its Q3 earnings results, with its revenue amounting to $9.16 billion, missing the consensus estimates of $9.28 billion. However, its adjusted EPS of $0.89 surpassed Wall Street's expectations of $0.88.
For the current fiscal year, ending in December, analysts expect Schlumberger’s EPS to grow 14.1% year over year to $3.40 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in all four quarters.
Among the 22 analysts covering SLB stock, the consensus rating is “Strong Buy," based on 18 “Strong Buy” ratings, three “Moderate Buys,” and one “Hold.”
This configuration has been almost consistent over the past month.
On Oct. 21, Arun Jayaram from JPMorgan Chase & Co. (JPM) maintained a ‘Buy’ rating on Schlumberger, with a price target of $55, which indicates a 38.3% upside from the current levels.
The mean price target of $58.81 represents a 47.9% premium to SLB’s current price levels. The Street-high price target of $71 suggests an upside potential of 78.6%.
On the date of publication, Rashmi Kumari 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.
