Schlumberger today
Schlumberger
- 52 week range
- $36.52
▼
$55.69
- Dividend yield
- 2.52%
- P/E ratio
- 14.01
- Target price
- $56.03
Oilfield services are on the rise with no end in sight: Schlumberger does business as SLB New York Stock Exchange: SLBis in an ideal position to make a profit and uses artificial intelligence to do this. The increase in the cycle is due to factors such as insufficient investment before 2020 and technology. In this case, the technology is focused on improving oilfield equipment in combination with the Lumi platform. Lumi is SLB’s artificial intelligence platform for the oil field.
“AI is the X-factor for our industry and I am confident that SLB will continue to be a leader in this area, allowing us to deliver sustainable excellence to our customers, partners and shareholders,” said SLB CEO Olivier Le Peuche.
Lumi is an on-premise or cloud-based service that uses generative AI and LLM to extract insights from complex data sets across cloud domains. These services improve efficiency and accuracy at all levels, from exploration to production, significantly reducing costs and CO2 impacts. To make AI easier to implement and use, Lumi is not the only AI service. SLB also offers AI Factori. AI Factori is a B2B service that customizes artificial intelligence applications for oilfield operators that scale as they grow.
SLB wins as technology investment drives growth
SLB growth slowed sharply in the fourth quarter, as expected, but remains strong, ahead of analysts’ expectations, as technology investments offset weakness in well construction. Consolidated revenue of $9.28 billion rose 3.2% year-over-year and was 100 basis points ahead of MarketBeat analysts’ consensus estimates. Digital and integration led the way with 10% growth, followed by a strong 9% gain in production systems, a modest 4% gain in reservoir productivity, and was offset by a 5% decline in well construction.
Margin results in the fourth quarter and year-end are also good. The company increased its earnings at most operating levels, leading to system-wide improvement and accelerating single-digit GAAP and adjusted earnings growth. Adjusted earnings rose 7% and beat consensus by more than 200 basis points, with growth expected to continue. The only bad news is that net income declined due to investments and return of capital. The bottom line is that this company has solid cash and free cash flow, expected growth, and a solid return on equity.
SLB announces accelerated share repurchase
Dividend payments from Schlumberger
- Dividend yield
- 2.52%
- Annual dividends
- US$1.10
- Annual dividend growth for 3 years
- 30.06%
- Dividend payout ratio
- 35.37%
- Next dividend payment
- April 3
SLB Dividend History
Return on equity in the fourth quarter included dividends and share repurchases. The annual dividend distribution is over 2.5% and is compounded by active share repurchases. Buybacks in the fourth quarter amounted to nearly 1% of market capitalization in mid-January, and more than 3% for the full year. The balance sheet is healthy, with positive free cash flow for the quarter and year, allowing for a stronger balance sheet and acceleration of share repurchases in the first quarter of 2025. The company announced $2.3 billion in ASR, which is substantially completed, bringing the total to Q4 2024/Q1 2025. buybacks up to approximately 8% of market capitalization.
Buybacks are expected to continue to be strong due to cash flow and balance sheet health. Year-end highlights included increases in cash, accounts receivable, current and total assets, as well as unchanged inventories with no increase in total liabilities and low leverage. Share capital grew by more than 4.5% over the year; long-term debt is about 0.5 times equity and 3 times cash, leaving it in a fortress state.
SLB shares rise to critical resistance point: double-digit growth possible
The price action of SLB in 2024 will create a valuable opportunity for investors. Shares are trading at about 12 times earnings estimates as of mid-January, with a yield of more than 2.5%. The latest price action shows that the market is bouncing off the support target and is on its way to testing critical resistance. Post-release action has sent the market up another 2% and on the verge of setting new highs. The critical resistance point is around $42.75 and could easily be broken as it is below the analysts’ target range. The lowest target tracked by MarketBeat is $44, 3% above critical resistance, with a 35% gain listed in the consensus target.
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