Schlumberger may be overvalued with mixed growth prospects, but the 27 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $48.0 to $75.0 per share, for an average of $64.23. At today's price of $52.52, Schlumberger is trading -18.23% away from its average target price, suggesting there is an analyst consensus of some upside potential.
Schlumberger Limited engages in the provision of technology for the energy industry worldwide. The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. The company provides field development and hydrocarbon production, carbon management, integration of adjacent energy systems; reservoir interpretation and data processing services for exploration data; and well construction and production improvement services and products. Based in Houston, TX, the large-cap Energy company has 99,000 full time employees. Schlumberger has offered a 1.3% dividend yield over the last 12 months.
Schlumberger has a trailing twelve month P/E ratio of 22.0, compared to an average of 7.54 for the Energy sector. Based on its EPS guidance of 3.72, the company has a forward P/E ratio of 14.1. Based on the average compound growth rate of Schlumberger's historical and projected earnings per share, which is 10.8%, the company's PEG ratio is 2.0. This suggests that these shares are overvalued.
Furthermore, Schlumberger is likely overvalued compared to its book value, since its P/B ratio of 4.2 is higher than the sector average of 1.68. The company's shares are currently trading 103.0% above their Graham number, implying that they are overvalued in terms of earnings and book value.
If analysts are giving the the company a decent rating despite its hefty price point, it could be related to its strong cash flows. They might also believe that Schlumberger's positive margin growth trend will continue.
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $32,917 | $23,601 | $22,929 | $28,091 |
| Revenue Growth | n/a | -28.3% | -2.85% | 22.51% |
| Gross Margins | 12.8% | 11.0% | 16.0% | 18.4% |
| Gross Margins Growth | n/a | -14.06% | 45.45% | 15.0% |
| Operating Margins | 9.1% | 7.0% | 12.1% | 14.8% |
| Operating Margins Growth | n/a | -23.08% | 72.86% | 22.31% |
| Net Margins | -30.8% | -44.57% | 8.2% | 12.25% |
| Net Margins Growth | n/a | -44.71% | 118.4% | 49.39% |
| Earnings Per Share | -$7.32 | -$7.57 | $1.32 | $2.39 |
| EPS Growth | n/a | -3.42% | 117.44% | 81.06% |
| Diluted Shares (MM) | 1,385 | 1,390 | 1,427 | 1,428 |
| Free Cash Flow (MM) | $3,476 | $1,727 | $3,471 | $2,005 |
| FCF Growth | n/a | -50.32% | 100.98% | -42.24% |
| Capital Expenditures (MM) | -$1,955 | -$1,217 | -$1,180 | -$1,715 |
| Net Debt / EBITDA | 4.95 | 9.28 | 4.87 | 1.77 |
