Are SLB’s Revised Earnings and Valuation Pointing to a Deeper Shift in Energy Strategy?

• In the past quarter, Artisan Value Fund identified Schlumberger Limited as a key detractor in its energy holdings, emphasizing sector weakness due to falling oil prices and macro uncertainty, while earnings estimates for the company were also revised downward.
• An interesting insight is that despite short-term challenges, Schlumberger is currently viewed as undervalued compared to its five-year average earnings multiple, which may attract long-term investors.
• Given these revised earnings expectations, we'll explore how sector-wide pressure and uncertainty impact Schlumberger's longer-term investment outlook.

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Schlumberger Investment Narrative Recap

Owning shares in Schlumberger means believing that global energy demand and the company's exposure to international hydrocarbon markets will outlast short-term price cycles and sector volatility. The recent Artisan Value Fund commentary and earnings revisions highlight how ongoing macroeconomic uncertainty and sliding oil prices continue to weigh on short-term results; however, these factors do not materially alter the core catalyst of resilient international spending, but they do keep near-term earnings pressure firmly in focus.

Of the latest announcements, the second-quarter earnings report is most relevant, reflecting YoY declines in revenue and profit as well as tempered guidance for the back half of 2025. This reinforces the reality that while Schlumberger’s valuation appears attractive relative to its five-year average, any recovery is closely tied to the pace at which sector-wide spending stabilizes and international activity resumes.

On the other hand, investors should be aware that geopolitical risks and operator spending cuts could still...

Read the full narrative on Schlumberger (it's free!)

Schlumberger's narrative projects $38.7 billion revenue and $5.0 billion earnings by 2028. This requires 2.9% yearly revenue growth and a $0.9 billion earnings increase from $4.1 billion today.

Uncover how Schlumberger's forecasts yield a $45.46 fair value, a 28% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 13 Simply Wall St Community members span a wide range, from US$35.00 up to US$66.22 per share. In a period of weaker oil prices and earnings downgrades, this diversity highlights just how much opinions differ on Schlumberger’s prospects.

Explore 13 other fair value estimates on Schlumberger - why the stock might be worth as much as 86% more than the current price!

Build Your Own Schlumberger Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Schlumberger research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Schlumberger research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Schlumberger's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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