On Monday, Stifel maintained a Buy rating on shares of NYSE:SLB, the stock of oilfield services giant Schlumberger (NYSE:SLB), while slightly increasing the price target to $65 from the previous $64. This adjustment comes after evaluating the company's second-quarter 2024 results, third-quarter guidance, and the outlook for the full year.
The company's second-quarter performance and projections for the third quarter have bolstered analysts' confidence in Schlumberger. The firm is poised to capitalize on escalating international and offshore activities, along with its new digital service offerings.
Schlumberger has set ambitious targets, aiming to return $3 billion to shareholders in 2024 through a balanced mix of buybacks and dividends, and increasing that figure to $4 billion in 2025.
The analyst's statement highlighted Schlumberger's consistent track record of success and recent findings from Kimberlite Research that underscore the company's robust positioning. The anticipated 14-15% increase in EBITDA for 2024 reinforces the positive stance on the stock.
Schlumberger's focus on delivering shareholder value is evident in their strategic financial goals. The company's commitment to equal distribution of capital returns between buybacks and dividends in 2024, followed by an elevated return in 2025, reflects a strong financial policy aimed at rewarding investors.
The slight increase in the price target to $65 reflects the firm's confidence in Schlumberger's ability to benefit from the current industry environment and its strategic initiatives. The analyst reiterated the Buy rating, signaling continued optimism for the stock's performance.
In other recent news, SLB outperformed financial projections with its second-quarter earnings, showing a 3% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) that exceeded expectations.
The company's adjusted earnings per share (EPS) came in at 85 cents, beating the consensus of 83 cents. This financial success was largely due to robust international growth, which resulted in revenues 1% higher than consensus estimates.
SLB also made headlines with two significant collaborations with TotalEnergies (EPA:TTEF), including a contract for a 13-well Subsea Production System and related services for the Kaminho project in Angola's Kwanza Basin.
Another noteworthy development is the proposed acquisition of ChampionX, valued at $7.75 billion, which has been delayed due to a second request for more information from the U.S. Department of Justice.
Analysts have responded positively to these developments, with TD Cowen raising SLB's price target to $64.00 and maintaining a Buy rating. Similarly, RBC Capital and Citi have held steady with their respective price targets of $69.00 and $62.00, both maintaining positive ratings on the company. These are just a few of the recent developments contributing to SLB's strong performance in the market.
InvestingPro Insights
Following Stifel's positive outlook on Schlumberger (NYSE:SLB), recent data and insights from InvestingPro further illuminate the company's financial landscape. Schlumberger's market capitalization stands at a robust $70.9 billion, and with a P/E ratio of 16.16, it's trading at a premium relative to near-term earnings growth. Still, this premium may be justified considering the company's revenue growth over the last twelve months as of Q2 2024, which is reported at 12.68%, signaling healthy top-line expansion.
InvestingPro Tips indicate that Schlumberger has maintained its dividend payments for an impressive 54 consecutive years, underscoring a strong commitment to shareholder returns. Moreover, the company's liquid assets surpassing short-term obligations suggest a solid liquidity position. With these factors in mind, investors can appreciate Schlumberger's financial stability and the potential for continued profitability, as analysts predict a profitable year ahead.
For investors seeking a deeper dive into Schlumberger's financials and strategic positioning, InvestingPro offers additional tips, including insights on stock volatility, debt levels, and profitability over the last twelve months. To access these valuable tips and more, visit https://www.investing.com/pro/SLB and consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. In total, there are 9 additional InvestingPro Tips available that could help investors make more informed decisions.
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