Schlumberger (SLB – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Roger Read from Wells Fargo maintained a Buy rating on the stock and has a $70.00 price target.
Roger Read has given his Buy rating due to a combination of factors including strategic acquisition moves and anticipated financial benefits. Schlumberger’s all-stock merger with Champion X is seen as a short-term positive push, with the merger expected to result in modest synergies and increased cash returns to shareholders. Specifically, Schlumberger plans to return $7 billion to shareholders over two years, an increase from the previously stated $5 billion. Moreover, the long-term strategy aligns with operating expense spending trends, as Exploration & Production companies are focusing on minimizing spending while maximizing volumes.
Furthermore, the transaction is slated to be accretive to Schlumberger’s free cash flow per share in 2025 and to earnings per share in 2026. The anticipated pre-tax synergies, which are expected to peak at about $400 million within three years, are likely to derive from reduced operating costs, supply chain optimization, and general and administrative savings. Additionally, the acquisition is set to enhance Schlumberger’s presence in the less cyclical and growing production and recovery space, suggesting a strategic fit with a capital-light, returns-focused approach. These factors collectively underscore Read’s optimistic outlook for Schlumberger’s stock.
In another report released today, Jefferies also assigned a Buy rating to the stock with a $71.00 price target.
Based on the recent corporate insider activity of 93 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SLB in relation to earlier this year.
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Schlumberger (SLB) Company Description:
Founded in 1926, Schlumberger NV is an oilfield services company, which provides technology for reservoir characterization, drilling, production and processing to the oil and gas industry. It operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems.
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