How Smart Investors Look at Schlumberger (SLB)

Schlumberger logged a 3.5% change during today's None session, and is now trading at a price of $54.5 per share. The S&P 500 index moved 2.3% and the Nasdaq posted a 2.8% change. SLB's trading volume is 10,162,741 compared to the stock's average volume of 12,785,635.

Schlumberger shares moved 55.2% over the last 52 weeks, with a high of $56.04 and a low of $30.65. During this time, the stock underperformed the S&P 500 index by 71.8%. As of January 2022, the company's 50-day average price is $52.0. Schlumberger Limited provides technology for the energy industry worldwide. The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. The large-cap Energy company has 92,000 full time employees and is based in Houston, TX. Schlumberger has returned a 1.1% dividend yield over the last 12 months.

Overview of the Company's Strong Financials:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $32,917 $23,601 $22,929
Revenue Growth n/a -28.3% -2.85%
Gross Margins 12.8% 11.0% 16.0%
Gross Margins Growth n/a -14.06% 45.45%
Operating Margins 9.1% 7.0% 12.1%
Operating Margins Growth n/a -23.08% 72.86%
Earnings Per Share -$7.32 -$7.57 $1.32
EPS Growth n/a -3.42% 117.44%
Free Cash Flow (MM) $3,476 $1,727 $3,471
FCF Growth n/a -50.32% 100.98%
Capital Expenditures (MM) -$1,955 -$1,217 -$1,180
Net Debt / EBITDA 2.12 3.69 2.49

Schlumberger Is Overpriced:

Compared to the Energy sector's average of 9.11, Schlumberger has a trailing twelve month price to earnings (P/E) ratio of 26.3 and, based on its EPS guidance of 2.98, an expected P/E ratio of 18.3.

Schlumberger's price to book (P/B) ratio is 4.5 compared to its sector average of 1.45. The company is likley overvalued in terms of its net tangible assets. The company's shares are now trading 187.1% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * EPS * book value per share) = √(22.5 * 1.32 * 12.129) = $18.98

Schlumberger Is the Subject of Mixed Market Indicators:

28 analysts are following Schlumberger and have set target prices ranging from $44 to $69 per share. On average, they have given the company a rating of buy. At the current price of $54.5, SLB is trading -8.94% away from its average analyst target price of $59.85 per share, implying an analyst consensus of some upside potential for the stock.

The company has a very low short interest since 1.5% of the company's shares are tied to short positions. Institutions own 85.8% of Schlumberger's shares, while the insider ownership rate stands at 0.15%. The biggest shareholder is the Vanguard Group, Inc. with a 9% stake in the company worth approximately $6,714,992,633.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.