Schlumberger N.V.
SLB Details
Schlumberger N.V. (NYSE: SLB), with expertise in more than 120 countries, is a technology company that provides digital solutions and deploys innovative technologies to facilitate performance and sustainability for the global energy industry.
Financial Results for Q2 FY 2022
- SLB has posted revenue of USD6.8 Bn, reflecting an increase of 14% on a sequential basis as well as 20% YoY growth. Notably, its EPS (excluding charges and credits) stood at USD0.50, implying an increase of 47% sequentially and 67% YoY.
- The company’s growth was broad-based, which was driven by higher activity internationally, in North America, as well as throughout all the divisions.
- SLB’s board also approved quarterly cash dividend of USD0.175 per share.
- This quarter was also characterized by the favorable mix of exploration as well as offshore activity and higher impact of improved pricing.
Key Updates
SLB has announced that it has entered into the partnership with Gradiant, which is the global water solutions provider, in order to introduce key sustainable technology into the production process for the battery-grade lithium compounds.
Outlook
Further, the company expects year-on-year revenue growth in 2022 to remain in the high-teens to reach at least USD27 billion. The strength of the company’s second-quarter outperformance reflects the firmly established growth inflection as well as its ability to comprehensively participate in the drilling and completion activity growth globally.
Key Risks
SLB is exposed to competitive risk, and demand risk as the demand for its products and services is largely reliant on the levels of expenditures by its customers.
Valuation Methodology: Price/Earnings Per Share Based Relative Valuation (Illustrative)
Stock Recommendation
Over the last one year, the stock has given a return of ~27.8%. The stock is trading higher than the average price of 52-week low-high range for the stock at USD27.65-USD49.83, respectively.
The stock has been valued using P/E multiple-based illustrative relative valuation, and the target price so arrived reflects a fall of low double-digit (in % terms). A slight discount has been applied to P/E Multiple (NTM) (Peer Average), considering the near-term concerns over a global economic slowdown.
Considering the resistance and target level achievement, current trading levels as well as risks associated, it is prudent to book profits at the current levels.
Hence, a ‘Sell’ rating has been provided on the stock at the current price of USD43.39 per share (Time: 6:54 AM PT) as of 14 October 2022.
Technical Overview:
Daily Price Chart
Schlumberger N.V. (SLB) is a part of Kalkine’s Global Big Money Product.
Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for share price chart is based on October 14, 2022. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.