Raymond James has revised its price target for SLB (SLB, Financial), reducing it to $43 from an earlier target of $51, while maintaining an Outperform rating. The adjustment follows SLB's first-quarter performance, which surpassed expectations thanks to improved profit margins even as revenue declined sequentially.
The company's strategy involves concentrating on margin protection, which they are achieving through incremental cost-saving plans. Moreover, SLB is expected to enhance its free cash flow throughout the year, a move that could help reduce leverage, according to the analyst's insights.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 27 analysts, the average target price for Schlumberger Ltd (SLB, Financial) is $49.16 with a high estimate of $63.00 and a low estimate of $38.00. The average target implies an upside of 42.41% from the current price of $34.52. More detailed estimate data can be found on the Schlumberger Ltd (SLB) Forecast page.
Based on the consensus recommendation from 30 brokerage firms, Schlumberger Ltd's (SLB, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" 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 Schlumberger Ltd (SLB, Financial) in one year is $60.10, suggesting a upside of 74.1% from the current price of $34.52. 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 Schlumberger Ltd (SLB) Summary page.
SLB Key Business Developments
Release Date: April 25, 2025
- Revenue: $8.5 billion, decreased 3% year on year.
- North America Revenue: Increased 8% year on year.
- International Revenue: Decreased 5% year on year.
- Adjusted EBITDA Margin: 23.8%, up 18 basis points year on year.
- Pretax Segment Operating Margin: 18.3%, declined 60 basis points year on year.
- Digital & Integration Revenue: $1 billion, increased 6% year on year.
- Digital Revenue Growth: 17% year on year.
- Reservoir Performance Revenue: $1.7 billion, decreased 1% year on year.
- Well Construction Revenue: $3 billion, declined 12% year on year.
- Production Systems Revenue: $2.9 billion, increased 4% year on year.
- Cash Flow from Operations: $660 million.
- Free Cash Flow: $103 million.
- Capital Investments: $557 million in the first quarter.
- Net Debt: Increased to $10.1 billion.
- Earnings Per Share (EPS): $0.72, excluding charges and credits.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Schlumberger Ltd (SLB, Financial) achieved further adjusted EBITDA margin expansion year on year despite a challenging market environment.
- The company reported double-digit revenue growth in several international markets, including the United Arab Emirates, North Africa, Kuwait, Argentina, and China.
- North America showed positive results driven by the offshore market, with higher sales of digital and subsea production systems.
- Production Systems division experienced steady revenue growth and further margin expansion, supported by strong demand for surface production systems, completions, and artificial lift.
- Digital & Integration division saw a 17% year-on-year revenue growth as customers increasingly adopted digital technologies and solutions.
Negative Points
- First-quarter revenues decreased by 3% year on year, with lower revenue in international markets due to reduced drilling activity in Mexico, Saudi Arabia, and a steep decline in Russia.
- Reservoir Performance division faced revenue decline and margin impact due to challenges on new projects and lower evaluation and exploration activity.
- Well Construction division experienced a year-on-year revenue decline due to lower drilling activity across North America and international markets.
- The macroeconomic environment remains uncertain, with global upstream investment expected to decline compared to 2024.
- Tariff-related uncertainties pose potential risks to margins, particularly affecting imports of raw materials into the US and exports subject to retaliatory tariffs.
