Schlumberger Limited (SLB) is an oilfield services company based in Houston, Texas. It provides services to oil and gas explorers and producers worldwide. Valued at $69.68 billion by market cap, it helps upstream energy companies locate oil and gas and drill and evaluate hydrocarbon wells. It also supports oil and gas explorers in constructing new wells and improving production from existing ones.
Shares of this leading oilfield services provider have underperformed the broader market considerably over the past year. SLB has gained 6.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.5%. In 2024, shares of SLB are down 6.6%, while the SPX is up 10% 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 gained about 26.4% over the past year compared to SLB’s high double-digit gains for the period. Moreover, the ETF’s 5.3% gains on a YTD basis compare to the stock’s loss over the same time frame.
SLB’s shares fell nearly 10% as the Saudi Arabian government ordered state oil company Aramco to halt its oil expansion plan and to target a maximum sustained production capacity of 12 million barrels per day (bpd), 1 million bpd below a target announced in 2020. Aramco’s cut in production capacity raised worries about oil demand. Analysts said that the move could reflect a change in Saudi Arabia’s outlook for global oil demand and could be followed by Aramco restraining its capital investments.
Although the company reported better-than-expected Q1 EPS and revenue on Apr. 19, the stock has remained on a downtrend since then.
For the current fiscal year, ending in December, analysts expect SLB’s EPS to grow 17.8% to $3.51 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 20 analysts covering SLB stock, the consensus rating is a “Strong Buy.” That’s based on 17 “Strong Buy” ratings, two “Moderate Buys,” and one “Hold.”
This configuration is slightly more bullish than three months ago, with 16 suggesting a “Strong Buy.”
TD Cowen analyst Marc Bianchi recently maintained a “Buy” rating on SLB stock and lowered the price target from $64 to $63, implying a potential upside of 29.6% from current levels.
The mean price target of $66.82 represents a 37.4% premium to SLB’s current price levels. The Street-high price target of $77 suggests an ambitious upside potential of 58.4%.
On the date of publication, Dipanjan Banchur 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.
