SLB (SLB): Assessing Valuation After a Recent Share Price Pullback

Market context and recent performance

SLB (SLB) has been drifting lower in the past week, but shares are still modestly higher over the past 3 months, leaving investors weighing whether this pullback offers a reasonable reentry point.

See our latest analysis for SLB.

The slide in the latest 1 day share price return and softer year to date share price performance sit against a much stronger 5 year total shareholder return. This suggests long term holders have still been rewarded even as near term momentum cools.

If you want to see how other energy names are trading as conditions shift, it is worth scanning aerospace and defense stocks for fresh ideas beyond SLB.

With SLB delivering steady, if unspectacular, growth and trading at a notable discount to analyst targets, is this recent softness a mispricing investors can exploit or a sign markets already anticipate its next leg higher?

Most Popular Narrative: 17% Undervalued

With SLB last closing at $37.61 against a narrative fair value near the mid 40 dollar range, the market is being cast as overly cautious on its long term cash generation.

The analysts have a consensus price target of $45.429 for Schlumberger based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $63.0, and the most bearish reporting a price target of just $36.0.

Read the complete narrative.

Want to see what powers that upside gap? The narrative leans on steady top line expansion, widening margins and a richer earnings multiple. Curious which specific levers matter most?

Result: Fair Value of $45.31 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent macro uncertainty and potential stumbles integrating ChampionX could easily derail the expected digital-driven margin expansion and long-term earnings growth.

Find out about the key risks to this SLB narrative.

Build Your Own SLB Narrative

If this view does not quite match your own or you prefer digging into the numbers yourself, you can build a custom take in minutes: Do it your way.

A great starting point for your SLB research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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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