Stifel analyst Stephen Gengaro has revised his outlook for Core Laboratories (CLB, Financial), reducing the price target from $15 to $13 while maintaining a Hold rating. This adjustment comes in response to the company's mixed performance during the first quarter.
The main challenge stemmed from Core Laboratories' Reservoir Description segment, which failed to keep pace with the growth seen in the Production Enhancement segment. This uneven performance has led Stifel to project similar results for the latter half of the year. Factors contributing to this outlook include ongoing macroeconomic uncertainties, the impact of tariffs, and fluctuating oil prices.
Investors and stakeholders will be closely monitoring how Core Laboratories navigates these challenges in the coming months, especially as it aims to stabilize its operations across different business segments.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Core Laboratories Inc (CLB, Financial) is $16.40 with a high estimate of $24.00 and a low estimate of $11.00. The average target implies an upside of 41.26% from the current price of $11.61. More detailed estimate data can be found on the Core Laboratories Inc (CLB) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Core Laboratories Inc's (CLB, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Core Laboratories Inc (CLB, Financial) in one year is $21.47, suggesting a upside of 84.93% from the current price of $11.61. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Core Laboratories Inc (CLB) Summary page.
CLB Key Business Developments
Release Date: January 30, 2025
- Revenue: $129.2 million in Q4, down 4% sequentially; $523.8 million for full-year 2024, up 3% year over year.
- Reservoir Description Revenue: $86.8 million in Q4, down 2% sequentially.
- Production Enhancement Revenue: $42.4 million in Q4, down 7% sequentially and 3% year over year.
- Operating Income: $14.2 million for Q4 on a GAAP basis; $65.3 million for full-year 2024 ex-items, up 7% from 2023.
- Net Income: $10.4 million ex-items for Q4; $41.6 million for full-year 2024, up 10% from 2023.
- Earnings Per Share (EPS): $0.22 ex-items for Q4; $0.87 for full-year 2024, up 9% from 2023.
- Operating Margins: 16% for Reservoir Description in Q4; 4% for Production Enhancement in Q4.
- Free Cash Flow: $16.2 million for Q4; $43.4 million for full-year 2024, up from $14.2 million in 2023.
- Net Debt: Reduced by $11.7 million in Q4; $108.8 million at year-end 2024.
- Leverage Ratio: Improved to 1.31 at year-end 2024, lowest in over eight years.
- Interest Expense: $2.6 million for Q4, decreased 15% sequentially and 27% year over year.
- Capital Expenditures: $4.4 million for Q4; $13 million for full-year 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Core Laboratories Inc (CLB, Financial) reported a 9% increase in earnings per share for the full year 2024 compared to 2023.
- The company successfully reduced its net debt by nearly $12 million in the fourth quarter, lowering its leverage ratio to 1.31, the lowest in eight years.
- Core Laboratories Inc (CLB) returned excess free cash to shareholders by repurchasing nearly 265,000 shares of company stock during the fourth quarter.
- The company experienced a higher level of international product sales in 2024 compared to 2023, despite challenges in the US market.
- Core Laboratories Inc (CLB) generated a significant improvement in free cash flow, reaching $43.4 million for the full year 2024, up from $14.2 million in 2023.
Negative Points
- Revenue for the fourth quarter was down 4% compared to the prior quarter, primarily due to a decrease in US onshore activity.
- Geopolitical conflicts and trade sanctions in regions like Russia, Ukraine, and the Middle East negatively impacted demand for laboratory services.
- The company's operating margins in Production Enhancement were low at 4% for the fourth quarter.
- Completion diagnostic services in the Gulf of Mexico were delayed due to hurricanes, affecting the company's schedule and revenue.
- Core Laboratories Inc (CLB) faced challenges with reduced manufacturing efficiencies due to lower US onshore sales, impacting cost of sales.
